Rupee hits 57.11 a dollar, heads for new lows
07 Jun 2013
The rupee looked headed for a new low as the Indian currency weakened below 57 to the dollar, hitting 57.11 a dollar midway in trading on the inter-bank foreign exchange market today.
The rupee resumed trading higher at 56.70 per dollar against the previous closing level of 56.84, but declined further to levels below 57 amidst sustained dollar demand from importers and some banks.
The rupee's fall seems to be self-inflicted as it continues to weaken despite a slipping dollar index, which fell below 84 levels to 82.50, and the euro trading around $1.31.
In the overseas markets, the US dollar was down 6.49 yen from Thursday's levels of 97.07 yen, but up from the previous day's low of 95.88 yen.
The rupee value seems to be delinked from the international market and is determined by the volume demand for dollar in the local market.
Meanwhile, the rising external debt of the country is also adding to the pressure in the local currency market.
With a bullish outlook for the dollar as the US Fed starts unwinding its monetary stimulus, analysts expect the rupee to fall further to lows around 60 to a dollar by the year-end.
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