Rupee sinks to another lifetime low; trades at 58.32

Business

oi-Sunil

By Sunil Fernandes

Published: Tuesday, June 11, 2013, 9:11 [IST]

The rupee tumbled once again today, dropping to 58.32, from Monday's close of 58.15, on accelerated demand for the dollar. Today's fall like the last few days has largely been on worries over the widening current account deficit and firming of the dollar against major global currencies, including the Euro and the Japanese Yen.

Forex markets were worried over the very little intervention from the Reserve Bank of India to sell dollars, despite the sharp drop in the rupee. However, analysts believe that the RBI should do very little by way of intervention and let the rupee fund its own value against the dollar.

They reckon that the current account deficit which hit a record of 6.7 per cent of GDP for the Oct-Dec quarter highlighted poor fundamentals, which was impacting the rupee.

Talking to reporters in the national capital on Monday, Economic Affairs Secretary Arvind Mayaram said the panic in the market was "unwarranted". "I think this will settle down in a while. We should not worry but we are watching the situation closely," Mayaram said.

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