Indian rupee tumbles to new record low
Mumbai, May 23, 2012
The Indian rupee fell to a new record low on Wednesday, approaching the key psychological level of 56 against the US dollar.
The partially convertible currency fell to 55.94 to the dollar, below its previous record of 55.46 on Tuesday.
The fall comes despite RBI intervention earlier in the session pushed rupee to 55.52. Traders called the action "mild", and said they expected the rupee to fall further, said an Economic Times report.
The Indian currency has been consistently hitting record lows lately. Finance Minister Pranab Mukherjee yesterday said the government was taking steps to arrest the volatility in the foreign exchange market and that the Reserve Bank of India would intervene when necessary.
Global risk aversion is putting pressure on the domestic currency as foreign funds are pulling out money. Besides, a widening current account deficit and concerns of investment in India is also putting pressure on the rupee.