Mumbai: The Indian rupee Tuesday slipped to 55.47 against a dollar, hitting a fresh record low for the fifth session in a row, due to increased demand for the American currency from oil firms and weak cues from global markets.
The Indian currency hit a record low of 55.47 against a dollar before closing at 55.40 at the Interbank Foreign Exchange Market here.
The rupee had hit a low of 55.05 against a dollar in the intra-day trade Monday and closed at 55.03.
Finance Minister Pranab Mukherjee said the fall was largely due to the uncertainty in Eurozone and the government was taking steps to curb the slide.
‘The government is taking a series of steps. However, managing rupee is market-related. There is a lot of volatility,’ Mukherjee told reporters.
The Indian currency has lost over 20 percent of its value against dollar since the beginning of this year.
Mukherjee said the Reserve Bank of India will intervene in the foreign exchange markets as and when required.
In the last few weeks the RBI has announced some steps to control the slide in the value of Indian currency.
The RBI has asked banks to sell half of the foreign currencies in their accounts. In a bid to attract money from overseas, the RBI has raised interest ceiling that local banks can offer to overseas Indians in forex accounts.
The RBI has opened a direct dollar window for oil companies, which are worst hit because of the weakness in the domestic currency as they have to pay higher money for the same quantum of import.
Earlier in a written reply to a question in the Rajya Sabha, the finance minister said the government has taken a number of steps to ‘augment supply of foreign exchange to step stem rupee decline.’
The government's steps include liberalisation of External Commercial Borrowings policy and portfolio investment norms, steps to improve access to corporate bond market through infrastructure debt funds and the RBI's initiatives to curb speculation in the forex markets.