Rupee hits another record low of 56.22 a dollar

The rupee today hit 56.22 against the US dollar as the Indian currency continued to be hammered by sustained dollar demand from oil importers, foreign institutional investors and corporates.

The rupee, which rose to a high of 55.57 against the dollar in the intraday trade, ended the session at 56.00 against the dollar, paring part of the losses.

Non-deliverable forwards are pricing in more weakness to the rupee, implying levels of 56.46 in a month's time and 57.25 in three months. Standard Chartered Bank said in a report, citing technical chart analysts, that the rupee could fall to as low as 58.62 against the dollar.

The falling rupee is the main concern of policymakers now, as RBI's attempts to prop up the currency have not yet yielded the desired results.

RBI's move to limit exporters' forex holdings to 50 per cent did not yield the expected result as these turned out to be comparatively small.

The rupee, which has been the worst performing currency in Asia, has already dropped more than 13 per cent from its 2012 peak in February.

While Russia and China also registered moderate falls in the values of their currencies against the dollar, Brazil and South Africa have seen their currencies fall by 15.38 per cent and 10.61 per cent, respectively, against the dollar since 1 March 2012.

The rupee is a strange case where the currency is held hostage by plundering investors and overseas commodity hawks despite domestic economic stability and better corporate showing.