Rupee crashes past 55 to the dollar to new low

Mumbai: The rupee crossed the psychological mark of 55 to the dollar, finding a new low of 55.05 on Monday on concerns about continuing uncertainty in the global markets, especially in the euro zone.

The partially convertible rupee, which opened at 54.48 on Monday, was trading at 55.03 in late evening trade. The local currency has fallen 10.7% since February. Traders see it dropping to 55.25 levels in the next few days on continuing high demand for the dollar.

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The rupee closed below the 55 mark on Monday and traders expect it to fall further. Mint’s Dinesh Unnikrishnan looks at the key factors driving down India’s currency.

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According to traders, dollar demand from companies and defence-related dollar buying also weighed on the local currency. The Reserve Bank of India, which has been intervening in the market to support the currency in the last few sessions, was not seen selling dollars in the market on Monday, traders said.