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Indian rupee plummets to historic low against dollar

in International Business

Indian rupee plummets to historic low against dollar

                                                                                                    The Indian rupee has continued its downward slide of the past few days and hit an all-time low against the dollar in early trade on Wednesday.

The Indian currency fell to 55.82 rupees against the US dollar, down from 55.39 on Tuesday.

The slide comes amid concerns that slowing growth and a high rate of inflation may hurt India’s economy.

Analysts said worries about a global economic slowdown had fanned those fears further.

The Indian rupee has been dropping against the US dollar since August last year, falling by almost 26% against the US currency since then.

Various reports have suggested that India’s central bank, the Reserve Bank of India, could intervene by selling dollars via state-run banks to arrest any further falls.

Exporter rules

On Tuesday, Finance Minister Pranab Mukherjee said that the government was taking a number of steps to arrest the volatility in the foreign exchange market and boost the rupee.

Earlier this month, the central bank asked exporters to convert 50% of their foreign exchange holdings into Indian rupees in an attempt to prop up the currency.

It also said that exporters would only be allowed to buy foreign currency after using up all of the foreign exchange holdings in their accounts.

However, these attempts have so far not been able to stem the rupee’s fall.

Source: BBC

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