Rupee plummets to 61.10 a dollar despite RBI measures

The rupee posted record losses today, closing at a low of 61.10/11 against the US dollar, down 67 paise from the previous day's close of 60.43/44 a dollar and raising concerns over the effectiveness of RBI's measures to stem the fall.

Forex dealers expect the RBI to have intervened in the market today through dollar sales, to save the rupee, as the Indian unit came close to its record low of 61.21 hit on 8 July.

While the RBI has limited options, the government has not also taken any meaningful measures to improve long-term forex inflows and prop up the currency.

The rupee lost 3.4 per cent of its value against the dollar this week and is currently trading below its 15 July levels when the Reserve Bank of India unveiled its cash tightening steps to defend the currency.

In the futures market, the near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed around 61.45 to a dollar with total traded volume of $2.6 billion.

In the offshore non-deliverable forwards, the one-month contract was at 61.66 a dollar, while the three-month contract was at 62.56 a dollar.

Meanwhile, global investors continue to remain bearish on the rupee despite RBI's efforts to protect it from the free-fall.

They say the strengthening of the dollar and positive US macro economic data will uplift global cyclical stocks and may impact emerging markets adversely.

While the rupee initially responded to RBI's actions by showing some consolidation, the dollar continued to gain against the rupee since then, leaving forex markets bearish.