MUMBAI: Continuing its
downward drift, the rupee crossed a new all-time closing low of 55
against the dollar, settling at 55.04. The trend persisted in the
absence of any major flows despite intervention by the Reserve Bank of
India.
Dealers said that given the current inclination, the currency could slide to 56 to 57 levels. However, any depreciation beyond this level could trigger panic and lead to a currency crisis, which would force the central bank to come out with concerted efforts to support the rupee.
"Although there was resistance at the 53.90 levels, the rupee could not hold up for long," said a dealer. "The slide was almost entirely because of dollar demand from importers and the weakening of the euro in the international market.
Dealers said that given the current inclination, the currency could slide to 56 to 57 levels. However, any depreciation beyond this level could trigger panic and lead to a currency crisis, which would force the central bank to come out with concerted efforts to support the rupee.
"Although there was resistance at the 53.90 levels, the rupee could not hold up for long," said a dealer. "The slide was almost entirely because of dollar demand from importers and the weakening of the euro in the international market.
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