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Rupee weakening continues amid lack of capital inflows

23 May 2012 Evaluate

Indian rupee touched a new record low against American currency on Wednesday due to lack of capital inflows, as investors were cautious about the growth story of Indian economy. RBI’s measures to target arbitrage and speculation in the currency futures markets were unable to limit the rupee fall. Weak performance of local equity markets and increased demand for dollar from importers also pressurized rupee to an extent. However rupee has been worst performing among its Asian peers, having lost 22% this year. Meanwhile, government has guaranteed that it will be taking a series of steps to limit rupee depreciation.

The partially convertible currency is currently trading at 55.84, weaker by 45 paise from its previous close of 55.39 on Tuesday. It has touched a high and low of 55.88 and 55.57 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 54.88 and for Euro it stood at Rs 70.20 on May 22, 2012. While, the RBI's reference rate for the Yen stood at 69.08, the reference rate for the Great Britain Pound (GBP) stood at 86.8410. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP

May 22, 2012

54.8886.84

May 21, 2012

54.68 86.52
(RBI-reference rate)

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