Indian Rupee hits life low of 64.54 despite RBI intervention
Thursday, 22 August 2013 00:00
Reuters: The rupee plunged to a record low on Wednesday on heavy dollar demand by importers and as traders fretted over mixed signals from the central bank over its efforts to prop up the currency without choking off economic growth.
The rupee fell nearly 2% to a record low of 64.54 to the dollar despite what traders said was sporadic RBI intervention in both the spot and forward markets.
Measures by the Reserve Bank of India late on Tuesday to support longer-dated credit sent prices of beaten-down bonds sharply higher but also led traders to question the central bank’s resolve in defending the currency.
Since mid-July, the RBI has taken steps to tighten cash conditions, which have failed to support the rupee but sent bond yields surging, posing a fresh threat to the already cooling economy.