The Indian rupee on Thursday closed at an all-time low of 59.57 against the US dollar, retreating from nearly 60-levels, on suspected Reserve Bank of India (RBI) intervention and pep talk from government.
At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced sharply lower at 59.50 a dollar from Wednesday's close of 58.70 and dipped further to log its all-time low of 59.93 as
market participants panicked after US Federal Reserve Chairman Ben Bernanke said $85 billion a month bond buying programme may be slowed down from this year.
Having being hit hard by hefty outflows in opening trade, the rupee saw a marginal recovery to end at 59.57, still down 87 paise, or 1.48 per cent, over Wednesday's close, after Chief Economic Advisor to Finance Ministry
Raghuram Rajan said the government is ready to take steps to curb volatility and is "not short of instruments" to tackle slide in the rupee.
Continued
selling by foreign funds in equities also put pressure on the rupee as overseas investors pulled out over Rs 2,000 crore on Thursday.
The dollar index was up by 0.72 per cent against a basket of six major global rivals after the Fed said it may have scope to reduce the pace of monthly bond purchases, if the economy improves in line with its forecasts,
shattering the global stock as well as forex markets.
The BSE Sensex tanked by over 526 points on Thursday, its biggest fall in 21 months, to end below the 18K-level.
"Ballooning current account deficit and cloudy outlook of reforms have added to the local currency's woes. Outlook of rupee is expected to remain weak till structural steps are taken to improve CAD," said Kuntal Sur, Director, KPMG.
With inputs from PTI
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