MUMBAI:India's rupee sank to a record closing low of 53.92 against the dollar Monday, dragged down by weak domestic economic data and an investor flight to safety on jitters over the euro zone debt crisis.
The unit hit an intraday low of 53.96 against the dollar -- a level last seen in December -- which traders said likely promptedIndia's central bank to intervene in forex markets to prevent the rupee breaching the key 54 level.
Traders say the central bank appears to have intervened to sell dollars more than a dozen times this year in a bid to curb the Indian currency's fall.
The bank has a policy of not commenting on its actions in the forex market.
"The falling rupee is a sign of worry. It is in a bearish zone due to global pressures," said Naveen Mathur, associate director of commodities and currencies at Mumbai's Angel Broking.
The unit was weakened Monday by data showing annual inflation unexpectedly accelerated in April to over seven percent, reducing chances of swift interest rate cuts to boost slowing economic growth.
The currency also been hurt by global uncertainty, flagging domestic indicators, slowing overseas funds inflows and pressure from oil importers, who must exchange rupees for dollars when they buy crude.
Energy-poorIndiaimports four-fifths of its crude oil needs.
Analysts say the rupee could hit new lows in the coming days due to gloomy economic conditions.
The Reserve Bank ofIndiaannounced new measures last week to boost the currency by ordering exporters and other foreign-exchange earners to convert half of their total forex earnings kept in banks into rupees.
The rupee wasAsia's worst performing currency in 2011 but after it hit a record low of 54.30 against the dollar in mid-December it rebounded to 48.67 rupees in February, led by strong foreign fund buying of Indian assets.
But the currency then headed lower again against the dollar amid a welter of indicators pointing to difficulties ahead for the Indian economy.
The inflation data also pushed Indian shares down half a percentage point Monday to a near four-month-low of 16,215.84.