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Rupee hits record low, FinMin says panic in market 'unwarranted'

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Rupee hits record low, FinMin says panic in market unwarranted
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Mumbai: The rupee on Monday plunged by 48 paise to hit its lifetime low of Rs. 57.54 in early trade on heavy dollar demand and the US currency strengthening against major rivals overseas.

Forex dealers said a firming dollar against euro and other currencies in the global market on the back of better-than-expected US jobs report and strong demand for the American currency from importers mainly weighed on the rupee.

The rupee had lost 22 paise to close below the key 57 mark at 57.06 on Friday against US dollar for the first time in a year.

With rupee plunging to life-time low of 57.54 verus dollar, the Finance Ministry Monday said there is an unwarranted panic in the market and hoped it will settle down in a some time.

"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," Economic Affairs Secretary Arvind Mayaram told reporters on sidelines of a workshop here.

This, he said, started off with misinterpretation of what Federal Reserve Chairman Ben Bernanke had said in terms of Quantitative Easing (QE) recently.

"They have now more than clarified that this (Quantitative Easing) is not imminent neither it is going to something which will happen quickly. I think this will settle down in a while. We should not worry but we are watching the situation closely," he said.

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