Rupee hits all-time low of 60; will act when necessary, govt says

 

Mumbai, 20 June 2013 (PTI): The rupee trimmed its early losses but was still quoted lower by 83 paise to 59.53 per dollar after hitting 60-level on strong demand for the American currency from banks and importers amidst sharp fall in equity market.

 

We are not short of actions or instruments as and when the need arises, said govt’s chief economic advisor Raghuram Rajan on rupee dipping to an all-time low.

We will be alert to the development, we do not like volatility and take actions when necessary, Rajan said.

Rajan said rupee is not in a shambles and cautioned against being overtly pessimistic.

The government’s chief economic adviser said the finance ministry, RBI and the SEBI are watching the markets.

The rupee resumed lower at 59.50 per dollar against the last closing level of 58.70 per dollar atInterbank Foreign Exchange (Forex) Market and dropped further to an all-time low of 60.00 per dollar before quoting at 59.53 per dollar at 10.40am.

Meanwhile, the S&P BSE sensex fell below the 19,000 level due to all-round selling pressure as the rupee hit record low.

The sensex resumed lower at 19,069.20 and dropped further to a low of 18,822.65 before quoting at 18,885.63 at 10.30am, showing a net loss of 360.07 points, or 1.87 per cent from its last close.

The NSE 50-share Nifty also dropped sharply by 124.45 points, or 2.09 per cent, to 5,700.80 at 10.30am.

Stocks fell across Asia after Federal Reserve chairman Ben Bernanke said after a two-day policy meeting that the central bank may reduce bond purchases later this year should the US economy strengthen.

Concerns about the health of the Chinese economy also weighed on sentiment after a survey showed further slowdown in China’s manufacturing sector.

Persistent capital outflows from foreign funds also affected the market sentiment. Foreign institutional investors sold shares worth a net Rs 544.97 crore on Wednesday, as per provisional data from the stock exchanges.