Rupee sank to a record low of 53.21 per
dollar today tracking weak equity market and on worries Europe's debt
crisis could exacerbate the growth slowdown in Asia's third-largest
economy. Rising import bill, concern over outflows from equity market
also weighed on local currency. India's industrial output fell 5.1% in
October, far more than the median forecast for a 0.5%. It was the
first monthly drop in more than two years.
The Reserve Bank of India has said that
it will intervene only to smoothen volatility, and not to target
specific levels. Increasing dollar demand from oil importers also push
down the rupee. India imports more than three-quarters of its oil
requirements and local refiners are the biggest buyers of dollars in the
domestic currency market.
Asian stocks declined and the euro
languished near a two-month low as investors took fright at the prospect
of mass euro zone sovereign ratings downgrades after the outcome of a
"last chance" European Union summit failed to convince markets.
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