Indian Rupee hits low against dollar

The Indian rupee closed at a record low against the dollar in Mumbai on Tuesday, amid growing dollar demand by Indian oil refiners and other importers.The rupee was down to 52.21 to the greenback at the close of markets after touching 52.73 during the day. The rupee closed at 52.15 on Monday.

The previous all-time closing low of the currency was 51.97 registered on March 3, 2009.

Foreign investors were also holding back due to concerns over the European debt crisis, near-double-digit inflation and a slowing of the Indian economy.

The currency has dipped by about 15 per cent since January and is the worst-performing of Asia’s 10 most-traded currencies.

There has been a demand for an intervention by the Reserve Bank of India, which has in the past sold dollars to buttress the rupee.

Finance Minister Pranab Mukherjee said the bank was keeping an eye on the rupee but an intervention at this stage would not help because the depreciation reflected the international situation, NDTV Profit business channel reported.

“It is just moving according to market dynamics,” Reserve Bank of India deputy governor Subir Gokarn said. “It is a problem but any action we take now have to take into account that these actions might have consequences a little further down the road.” Tuesday’s weakening of the rupee came despite a rebound in share markets which posted gains of 0.7 per cent after dipping 2.6 per cent Monday.

The benchmark 30-share Sensex index on the Bombay Stock Exchange closed the day’s trade at 16,065.42 points, up 119.32 points or 0.75 percent from a day earlier.

The broader 50-share S&P CNX Nifty on the National Stock Exchange also rose by 34 points, or 0.71 per cent, and ended the trading at 4,812.35.