Mumbai,
May 23: The Indian rupee breached another psychological level of 56
against a dollar Wednesday and plunged to a low of 56.18 in the
intra-day, hitting a record low for the sixth session in a row.
The
partially convertible rupee hit a low of 56.18 in the intra-day before
closing at 56 against a dollar, due to persistent demand for the
American currency from importers and banks amid rising risk aversion in
the global markets.
The Indian currency has hit new
intra-day low for the sixth consecutive session. It had hit a record low
of 55.40 against a dollar Tuesday.
The rupee has
weakened by over three percent in just three sessions this week despite
assurances and interventions in the currency markets by the Reserve Bank
of India.
Finance Minister Pranab Mukherjee expressed disappointment over the sharp drop in the value of the rupee.
Mukherjee
blamed global uncertainties and rising oil imports bill for the
battering of the Indian currency. "Quantum of India's oil imports is
substantial at around $160 billion to $170 billion annually," he said.
The American dollar has strengthened against major global currencies including euro and Japanese yen.
However,
the Indian currency is the worst hit. It has lost nearly 23 percent of
value against the dollar since the beginning of this year, the worst
performance among major global currencies.
Indian stocks markets have also come under pressure due to the persistent slide in the value of rupee.
The
benchmark Sensex of the Bombay Stock Exchange slipped below the
16,000-point mark. The index ended the day 0.49 percent lower at
15,948.10 points Wednesday.
The wide-based Nifty of the National Stock Exchange fell 0.51 percent at 4,835.65 points.
Addressing
the officers of the Indian Economic Service, Mukherjee expressed hope
that the current phase of economic difficulties would be over soon given
the resilience of the Indian economy.
"We will be able
to overcome successfully the difficulties presently facing the Indian
economy so as to get it back to the path of higher growth trajectory,"
he said.
Chairman of the Prime Minister's Economic
Advisory Council C. Rangarajan said the RBI would announce new measures
to boost foreign funds inflow.
Rangarajan said selling dollars directly to oil importers was an option the central bank might want to consider.
The Reserve Bank of India (RBI) has taken a series of measures in the last few weeks to curb the rupee slide.
The
RBI has asked banks to sell half of the foreign currencies in their
accounts. In a bid to attract money from overseas, the RBI has raised
interest ceiling that local banks can offer to overseas Indians in forex
accounts.
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