You are here: Home » Finance » News » Others
Business Standard

Re falls to new low

Hits 56.56 against the dollar before closing at 56.31

BS Reporter  |  Mumbai 

Global risk aversion dragged to a fresh all-time low of 56.56 on Thursday, as investors shed risky assets and the strengthened. Spot intervention by the central bank helped pull back, but buying by oil companies and foreign institutional investors led the currency to register a record low close of 56.31 a dollar, as against yesterday’s close of 56.15.

had fallen to 56.52 against the on May 31. Yesterday, the said it had lowered the US economic growth projection in 2012 to 1.9-2.4 per cent from the 2.4-2.9 per cent expected earlier. The index, which measures the currency against six major currencies of the world, had risen to 81.74 on Thursday from 81.58 a day before.

FIIs sold Rs 1,763 crore from Indian equity markets on Thursday, according to data from the The net outflows were Rs 257 crore. Both equity markets closed with 0.8 per cent gains. Traders said the Reserve Bank of India (RBI) sold dollars around Rs 56.45 apiece in early trade and later around 56.56. “The intervention would be $200-300 million and it was not sufficient to meet demand in the market,” said a foreign exchange trader with a private bank.

  Jun 21 ‘11 Jun 21 ‘12 % change
Brazilian real 1.59 2.03 -27.71
Indian rupee 44.85 56 -25.6
South African rand 6.72 8.22 -22.4
Russian rouble 27.92 32.82 -17.6
Chinese renminbi 6.47 6.36 1.6
Compiled by BS Research Bureau                                   Source: Bloomberg
> Governor recently said while the currencies of Brazil and Russia were not comparable to the rupee, the two being net exporters of commodities, unlike India, the South African currency was more relevant for a comparison. 
The above comparison shows has depreciated more than the South African rand

On Tuesday, Governor had said the central bank would continue with the policy of intervening only to smoothen volatility in the foreign exchange market. He said depreciation was on the back of both global and domestic factors. He said in August-December, the currency had depreciated on the back of global risk-aversion and appreciated in the next phase of January-February due to measures taken by

The Indian currency has lost 10 per cent since the start of the current financial year. It is expected to stay weak. and Kaushik Das, economists at Deutsche Bank, said, “recognises the rupee’s prospects would depend on global risk appetite and the sustainability of capital flows to India and, hence, the central bank is unlikely to push for a much stronger exchange rate.”

First Published: Fri, June 22 2012. 00:11 IST