Rupee sinks below 61/$
Persistent demand for dollars put pressure on the weak rupee Mumbai (Agencies): The Indian rupee hit yet another record low on Monday, slipping...
Persistent demand for dollars put pressure on the weak rupee Mumbai (Agencies): The Indian rupee hit yet another record low on Monday, slipping past the psychological resistance level of 61 against a dollar, due to persistent demands for the US currency dollar from banks and importers. The partially convertible rupee opened weak and slumped to a record low so far of 61.21 against a dollar at the inter-bank foreign exchange market in Mumbai, surpassing its previous record low of 60.76 touched on June 26. The rupee closed at 60.61/62 as against 60.22/23 on Friday. It had traded at 60.94 level intra-day trading on Monday. Interestingly, even there were reports that RBI is intervening at 61.20 levels, the markets ignored those suggestions, however, after a short spell of gains, the currency once again turned weak. Although, the strong dollar is increasing pressure on emerging currencies, the rupee hit worst in Asia. The analysts say that the next trigger for rupee would be FOMC policy expected on July 10. For the last three months the Rupee has been in a down-trend and in July it lost about 3 per cent. It has lost over 10 per cent of its value this year, considered worst among the emerging currencies. Widening current account deficit and weak economic growth coupled with broad strengthening in the value of US dollar are the main reasons for weakness in the Indian currency. Even as RBI and Finance Ministry tried to boost the rupee but failed as demand for dollars would continue from oil marketing companies irrespective of RBI measures. Besides, there is no support from exports, as exporters are not entering market anticipate further fall on rupee. Analysts say that the government has to rush up for next round of reforms encouraging long term investments. In fact, the rupee might have factored all the negatives, but positive like good monsoon, is not being discussed. Instead, they say the mood is more bearish and predicting further fall. PM calls India Inc for a meeting New Delhi (IANS): Prime Minister Manmohan Singh will meet industry leaders this month to discuss economic challenges like depreciation of rupee, industrial growth and current account deficit. "The prime minister will meet the captains of industry July 29 to review steps to revive the economy," the PMO said in a statement on Monday. The discussion will cover measures to correct the current account deficit, revive industrial growth and the impact of depreciation of the rupee on trade and industry, the statement said. Development of industrial corridors between Delhi and Mumbai, Chennai and Bangalore and Amritsar-Delhi-Kolkata as well as skill development will also be on the agenda. Re dip impacts Sail New Delhi (PTI): With the rupee hitting new lows against the US dollar almost on a daily basis, the SAIL on Monday said that for every one rupee depreciation, on an annual basis, the company may have to take Rs 125-130 cr hit. The only saving grace could be the dipping price of the coking coal, a key input in steel-making, which SAIL requires to import around 10 million tonnes a year to fire the blast furnaces. "It is difficult to gauge total impact of depreciation of rupee on the company on an annual basis. But, according to a very rough estimates, every one rupee depreciation will have Rs 125-130 cr impact on the company," SAIL Chairman C S Verma said.