Rupee plunges to new low

By Our Special Correspondent

MUMBAI, MAY 24. The Indian currency touched an all time low of 44.14/16 to a dollar in the inter-bank foreign exchange market here today.

The rupee opened at 44.04/06 against the previous close of 44.02/03 and moved down to 44.10 but recovered to 44.08. In the afternoon it resumed its downslide to finally close at 44.14/16 on strong corporate demand for the greenback.

For the past two days, corporate demand for dollars had been building up and the Indian currency was feeling the pressure. Moreover, as the general confidence in stock markets started eroding and the fear of inflation was catching up, the rupee started slipping. ``This fall is due to the grim scenario in the economy,'' said Mr. Mayank Chamadia, senior research analyst at eMecklai, a leading foreign exchange firm.

``We can expect further depreciation of the rupee against the dollar in the next 2-3 weeks,'' Mr. Chamadia felt. He also feels that the Reserve Bank of India seems to be comfortable with the rupee depreciation. A lot in the economy would now depend on the monsoon forecast. If the forecast is not good then ``we can expect further loss of confidence in the health of the economy that can affect the rupee exchange rate adversely.''

The rupee was steady around 43.64/66 a dollar for many months whereas the dollar had been strengthening against other major currencies in world markets.

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Section  : Business
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