15 December 2011

Rupee Slide Continues, Now at Another All-Time Low

The Indian rupee fell to another all-time intra-day low to 53.75 to a dollar, amid continued demand for the greenback from importers and gloomy outlook for the global economy owing mainly to the debt crisis in Eurozone.

The rupee has now fallen nearly 19 percent from the 52-week high in July.
Rupee Slide Continues, Now at Another All-Time Low

"No finance minister will find it comfortable when rupee is declining," Finance Minister Pranab Mukherjee had said in the Rajya Sabha Tuesday, expressing concern over some adverse trends in the domestic economy such as decline in factory output and rising subsidies.

Industry now hopes the Reserve Bank of India (RBI) will intervene to arrest any further decline in the value of the partially-convertible currency like it did in September and October, even as experts predicted a further fall to 55 to a dollar.

The central bank had sold $845 million and $943 million in September and October.

A depreciating rupee makes imports costlier, and has a major impact on the country's oil bill by putting pressure on retailers to hike prices of at least de-regulated fuels like petrol and aviation turbine fuel and, thus, adding to the inflationary pressures.