BackRupee nears record low amid persistent dollar demand
Rupee ends 0.4% weaker at 57.07 per dollar, after touching 57.13, a shade above its all-time low of 57.15
Premium(Pradeep Gaur/Mint)
Mumbai: The rupee ended below 57 to the dollar for the first time since 27 June, 2012, amid persistent dollar demand, most likely from foreign funds as they encashed their investments in the local government bond market fearing a further weakening of the Indian currency.
The rupee ended at 57.07 per dollar, down from 56.85 on Thursday. It touched a 57.13 during the day, just a shade above its all-time low of 57.15 in June 2012.
“The rupee has weakened despite global dollar weakness today," said Mohan Shenoi, treasurer at Kotak Mahindra Bank Ltd. “Foreign funds are selling in the debt market because they fear that their current rupee investments in India will lose more value if they wait for some more time," Shenoi said.
The dollar weakened to 1.32 per euro on Friday from around 1.31 on Thursday.
Shenoi said fears that the US Federal Reserve will discontinue its lose monetary policy has also put pressure on the rupee since higher US rates will shrink the differential between that country and India.
“Till this pressure remains, the rupee will continue to be weak," Shenoi said.
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