RBI steps in yet Re slumps to new low of 56.22 on Greece woes

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened weak at 55.65 a dollar from previous close of 55.39 and immediately touched a high of 55.52.

However, heavy dollar demand from importers and some corporates pushed the rupee down wards to log a life-time low of 56.22 amid the US currency gaining strength against its major rivals as investors were spooked by renewed fears that Greece would exit Euro bloc. Euro hit a 20-month low ahead of a informal EU summit later today.

Forex dealers said the rupee recovered some ground on multiple interventions by the apex bank to end at 56--a record low at close. The currency has lost a whopping 150 paise in three straight sessions. Apart from interventions, RBI has announced several measures in the last one week, including capping limits on currency F&O, to stem rupee's free fall.

"There was selling of dollars from the public sector banks. So, the central bank could have intervened through this route," said N S Venkatesh, Head of Treasury, IDBI Bank.

Some experts, however, feel the rupee's slide could be finally coming to an end.

"...I feel that we are at the last lap of a bearish trend and the currency will appreciate from these levels," said Moses Harding, Head - ALCO and Economic & Market Research, IndusInd Bank.

However, if the Euro crisis accelerates further, there could be further pressure coming on rupee, making it touch a new low of 56.50 levels, said Abhishek Goenka, CEO, India Forex Advisors.

Meanwhile, the benchmark Sensex today closed down by 78.31 points or 0.49 per cent. (MORE)