MUMBAI: India’s rupee slid to a new record low against the dollar yesterday as the US currency was boosted by stronger than expected US jobs numbers.
The currency hit Rs61.20 to the US unit — moving past its previous low of 60.76 rupees on June 26 — as worries mount that the US Federal Reserve will reduce its stimulus programme that has prompted investor flows into emerging markets.
The Indian currency recovered in afternoon trade amid reports that the central Reserve Bank of India likely sold dollars through state-run banks to prop up the ailing rupee, dealers said.
The currency closed yesterday at Rs60.62 to the dollar.
“There was possible (RBI) intervention at Rs61.02 levels,” said Param Sarma, Chief Executive at NSP Forex, a forex consultancy firm in Mumbai.
Prime Minister Manmohan Singh will meet industry leaders on July 29 to discuss the rupee’s fall and ways to close the country’s gaping current account deficit, the broadest measure of trade, India’s Economic Times reported.
The current account deficit—which stems mainly from huge oil and gold imports and weak exports amid the global economic downturn — hit a record 4.8 percent of GDP in the fiscal year to March.
The rupee has also been dragged down by the sharply slowing economy. “Sentiment is extremely fragile for the rupee. Strong US economic data is driving the dollar up (and weakening the rupee),” said Sarma.
AFP
