Rupee plunges to new life low of 66.25 Vs dollar

Zee Media Bureau/Ajeet Kumar

New Delhi: The rupee on Tuesday plunged further by 195 paise to record low of 66.25 against the US dollar on the Interbank Foreign Exchange on strong demand for the American currency from banks and importers and persistent capital outflows.

The rupee had ended down 110 paise or 1.74 percent at 64.30 against the US dollar after hitting an intra-day low of 64.75 in the previous session.

Forex dealers said besides strong demand for the American currency from importers and banks, dollar's strength against other currencies overseas amid expectation that the Federal Reserve will soon taper its bond-buying programme weighed on the domestic currency.

They said several measures announced by the government and the RBI failed to check volatility in the rupee.

Weak domestic fundamentals such as record current account deficit concern too put pressure on the rupee, they said.

In order to arrest the rupee slide, RBI had announced measures such as restriction on Indian firms investing abroad and on outward remittances by resident Indians, triggering talks of return of capital control regime.
Meanwhile, global ratings agency Fitch on Monday said India's fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet the fiscal deficit target.

The rupee is down 16 percent so far this year despite efforts by policymakers to prop it up.