Rupee sinks at record low of 58.16 per Dollar

Rupee sinks at record low of 58.16 per Dollar

THE rupee on Monday sank by a daggering 110 paise to life-lime low of 58.16 against dollar, making the struggling economy further vulnerable as imports become costlier, inflation risks rise and record high CAD worsens.

A confluence of negative factors including heavy dollar demand and slowdown in capital inflows put pressure on the rupee, which has slumped by 8 per cent from 53.80 on April 30. Forex traders said there were no visible signs of RBI intervention to arrest rupee slide but expectations are high that the central bank will come with restriction on banks overnight net long positions to reduce the volatility and speculation like it did last year. Finance Ministry tried to sooth frayed nerves with Economic Affairs Secretary Arvind Mayaram saying. "If you see weakening of all currency vis-a-vis dollar, rupee is also not unaffected in that sense. But I think this is panic (in) the market which is unwarranted."

RBI Governor D Subbarao in a recent interview to PTI had said the central bank does not targei any level or band for the rupee against the dollar. At the Interbank Foreign Exchange (Forex) market on Monday. ihe rupee commenced lower ai 57.18 and immediately touched a high of 57.17.