Indian rupee hits record low
The Indian rupee dropped to a record low of 62.03 per dollar on Friday, sparking late intervention from the central bank as its measures to tighten capital outflows raised concerns they could spook foreign investors. The Reserve Bank of India late on Wednesday unveiled rules to restrict how much its citizens and companies can invest abroad and announced additional curbs on gold imports.
Copyright Reuters, 2013
The steps raised concerns of outright capital controls that would further undermine the confidence of foreign investors and also that they did not address the need to attract overseas investments to narrow the record high current account deficit.
"I am not surprised to see the rupee continuing to fall," said Suresh Kumar Ramanathan, regional fixed income and currency strategist for CIMB in Kuala Lumpur.
The partially convertible rupee closed at 61.65/66 per dollar compared with 61.43/44 on Wednesday. Financial markets were closed on Thursday for a national holiday. On the week, the rupee fell 1 percent.
In the offshore non-deliverable forwards, the one-month contract was at 62.29 while the three-month was at 63.26.
In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 62 with a total traded volume of $3.1 billion.