Mumbai: The rupee edged lower in opening deals on Tuesday following the dollar’s gains against some Asian currencies but gains in regional stock markets are stemming a sharp slide.
At 9:06am, the partially convertible rupee was at Rs48.6350/6400 per dollar, a shade weaker than Monday’s close of Rs48.56/58.
Reserve Bank of India cut its short-term rates by 1 percentage point each, its fourth cut since mid-October, and tried to draw more funds into the country to boost growth as it warned of a tough year ahead.
Foreign investment in local shares has been a key driver for the rupee over the last two years. In 2008, the rupee fell 19.1% on foreign withdrawals of more than $13 billion, while in the year before it rose 12.3% on record inflows of $17.4 billion.
Asian stocks edged up for a seventh day on Tuesday, boosted by hopes for a global economic recovery later in 2009, though the rising yen and falling high-yielding currencies suggested such optimism was limited.