Rupee dips to the years lowest
By Our Banking Bureau | 24 Jul 2004
The Rupee dipped down to 46.33 yesterday a level seen only last year around the same time.
The
rupee was going strong in 44 and 45 levels for most
of the year. The political uncertainty in the domestic
scenario has lent to this weakening of the currency
coupled by the rise in demand for the dollar by the
oil corporates has depleted forex supplies (oil being
priced at $ 42 per barrel), pushing up the dollar and
dragging down the rupee to its years lowest point.
Tracing the rupee back to its 44 levels in October — December, the Rupee was strong and had appreciated at an unprecedented 3.5 per cent following the 10.4 per cent growth rate shown by the GDP data reflecting the boom in the agricultural and allied sectors mainly but it was also seen that trade, travel and tourism, hotel and communications performed well aiding the projected GDP growth. The sudden upheaval post elections changed the positive sentiment towards the INR and soon rupee started to dip. The political change of scene has induced fear and a cautious market sentiment hindering the foreign investment from flowing in.
Furthermore, the dollar's immediate prospects have been improved significantly by Greenspan's relatively tough testimony of backing the dollar after the US data release.