Rupee at historic low against dollar

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Mumbai: The rupee today breached the 53- level for the first time in its history against the dollar on sustained capital outflows amid compounding woes of Indian economy. The local currency resumed lower at 53.10/11 per dollar at the Interbank Foreign Exchange (Forex) market and immediately tumbled to an all-time low of Rs 53.51.

It partially recovered to settle the day at 53.23/24 per dollar, a sharp loss of 39 paise from its last close. On Monday, the local unit had plunged by 81 paise on signs of capital outflows after the news of industrial output declining 5.1 per cent in October came out. Foreign exchange dealers said the local currency was weighed down on the dollar gaining strength in the overseas market, particularly against euro, amid the lingering eurozone crisis.

The US dollar gained against major currencies in New York market yesterday, while the euro fell to its lowest level in two weeks amid renewed concerns that European leaders aren`t doing enough to contain the region`s sovereign-debt crisis. They added that investors also remained deeply worried about India`s growth story. Economic slowdown, rising fiscal deficit and widening current account deficit (CAD) have dented investor confidence, they added.

"The rupee`s fall today is driven by the strengthening of dollar across global markets and continuous weakening of the euro. The Indian currency is going to witness sustained pressure in the coming days," Ramesh Krishnan, head of treasury operations, Dhanlakshmi Bank said.

The only positive, which can uplift the rupee is if the Reserve Bank does not take any rate action in its mid-quarterly monetary policy review on December 16, he added. Meanwhile, the stock markets surged with the BSE Sensex moving up 132 points to regain crucial 16,000-level.

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