Indian Currency Hits Life-time Low To 57.77 vs Dollar : Report

New Delhi, June 10, IRNA – Indian currency, the rupee Monday fell by a whopping 71 paise to hit a new life-time low of 57.77 in the late morning trade on persistent dollar demand from importers and banks. The rupee resumed lower at 57.18 against the dollar as against the last weekendˈs level of 57.06 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to an all-time low of 57.77 per dollar. This crosses its life-time closing low level of 57.32 touched in June-end last year. However, it recovered slightly to 57.60 per dollar at 1100hrs, showing a loss of 54 paise from its last weekendˈs level. Persistent dollar demand from importers and banks due to higher dollar in the international market mainly affected the rupee value against the dollar, a forex dealer said in Mumbai, business capital of India, pti reported. In the global market, the Japanese yen slipped in the early trade a day ahead of a central-bank decision, while lackluster Chinese economic data pushed the Australian dollar lower as well. Meanwhile, the BSE benchmark Sensex firmed up by 57.29 points, or 0.29 per cent, to 19,486.52 in the afternoon trade. Meanwhile, with rupee plunging to life-time low of 57.54 versus dollar, the Finance Ministry today said there is an unwarranted panic in the market and hoped it will settle down soon. ˈIf you see weakening of all currency vis-a-vis dollar, rupee is also not unaffected in that sense. But I think this is panic (in) the market which is unwarranted,ˈ Economic Affairs Secretary Arvind Mayaram told reporters on sidelines of a workshop here. This, he said, started off with misinterpretation of what Federal Reserve Chairman Ben Bernanke had said in terms of Quantitative Easing (QE) recently. Chief economic adviser Raghuram Rajan, who was also present at the event, said the weakness in rupee could be a temporary phenomenon. ˈIndia has large Current Account Deficit (CAD) and currencies of emerging markets (with) large CAD have depreciated more. This could be temporary phenomenon. But again let me reiterate government is not supportive of weakening of rupee and we would like more stability,ˈ he said. He, however, added that the government does not have specific level in mind where rupee should be at. Last week Finance Minister P Chidambaram, too, had said there was no cause for alarm and the currency would soon find its stable level. Rajan further said the medium-term measures which have been taken in past will continue and that will help rupee to find a level consistent with the sustainable growth. Among other steps, both the government and Reserve Bank of India (RBI) have taken steps to curb gold import in wake of widening CAD, which in turn exerts pressure on rupee value. Supported by portfolio capital inflows and various reform measures announced during the period, the rupee remained strong during December 2012 to early-February 2013. However, the rupee witnessed some weakness during the second week of February to early March and saw subsequent appreciation during April 2013. Rupee started its downward journey against the dollar in May and hit 11-month low levels. Federal Reserve Chairman Ben Bernanke had talked about scaling back of monetary stimulus with improvement in economic conditions in the US. The announcement caused worry in the entire Asian region as this stimulus, or QE, had made foreign funds attracted to emerging markets, including India and cutting down on this might dry up capital inflows./end