The Indian rupee continues to slump and hit a new low against of 60 against US dollar on Thursday.

New Delhi, June 20/Nationalturk – The Indian rupee hit a new low against US dollar on Thursday after hitting 60-level, affecting the stocks and bonds.

The rupee resumed lower at 59.50 per dollar against the last closing level of 58.70 per dollar at Interbank Foreign Exchange (Forex) Market. However, it dropped further to an all-time low of 60 per dollar before making some gains and quoting at 59.75 per dollar at 1040 hours.

The dollar held firm in Asia today after rallying on comments by the head of the US Federal Reserve that it could begin to scale back its monetary easing programme later this year.

The fall in the rupee further hit the stocks and bonds were hit.

In response to further slide in Indian rupee, Indian benchmark Sensex fell below the 19,000 level due to all-round selling pressure as the rupee hit record low against the dollar coupled with lower global cues. The Sensex dropped by 401.81 points, or 2.09 per cent, to 18,843.89 in the late morning trade.

Earlier, Indian rupee had hit its all-time intra-day low of Rs 58.98 on June 11.

Depreciation will impact India’s economy: Experts

Experts feel the rupee depreciation because of US Federal Reserve’s decision to start reducing the quantum of its monetary stimulus and halt it completely by mid-2014, will have a larger impact economy of countries like India.

“The impact of currency depreciation could worsen the current account deficit (CAD) in the immediate term as the immediate price impact will bloat imports and also induce inflationary pressure,” they said.

Govt not short of options: Economic Advisor

The Chief Economic Advisor to Indian Finance Ministry Raghuram Rajan said Thursday that the government is ready to take step to curb volatility of its currency.

“The government is not short of options to tackle the fall of the rupee and will take actions as necessary,” Rajan told media men after the rupee fell to a record low.

He said the Reserve Bank of India would take action to support the rupee as appropriate.

“We are not short of actions or instruments as and when need arises. We will be alert to development, we do not like volatility and will take actions when necessary,” he said.

Rajan claimed that the rupee was not in shambles. “We should not be overtly pessimistic. The Current Account Deficit (CAD) was large, but we are on way to tampering it. Gold imports are coming off its peak. CAD in June will be better than in May,” he added.

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Faiz Ahmad / NationalTurk India News

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