Rupee hits a 30-month low below 50 a dollar
21 Oct 2011
The rupee dropped to levels below 50 to a dollar in speculative trading on the interbank foreign exchange market today amidst heavy dollar demand from importers and oil refiners.
The rupee opened lower at Rs50.01/02 to a dollar against the previous close of Rs49.80/81 a dollar and dropped further to Rs50.17 a dollar - its lowest level since 29 April 2009.
The rupee closed at 49.80/81 against the US currency, the lowest in the past 28 months, still losing 65 paise against the dollar.
The steady decline in the value of the Indian currency, which puts further pressure on inflation, has posed fresh problems for the government and the Reserve Bank of India (RBI). This combined with the slackening of industrial growth in the country has limited policy options for both the government and the RBI.
The rupee had seen a period of consolidation since the 2009 peak, holding on to levels of Rs44 against the dollar and the current rise has been very sharp and swift. The dollar-rupee movement has been more surprising over the past month or so.
The rupee is expected to hold on to levels around 50 against the dollar in the near term.
