The rupee on Thursday hit an all-time low of 56.57 against the US dollar on sustained dollar demand from importers, before suspected intervention from the Reserve Bank of India helped the local currency recover some ground. The Indian currency still ended 15 paise down at 56.30.
“Importers are rushing in for dollar, which is pulling the rupee down,” said Abhishek Goenka, chief executive officer, India Forex Advisors. “As there are signs of the euro zone crisis getting over in near future, US dollar is expected to strengthen in the coming months and with no major reforms likely in the domestic front, we expect the rupee to touch 57.50 in the next two months.”
After a weak start at 56.40, the rupee dropped 42 paise to hit a new low of 56.57 per dollar, surpassing its previous record low of 56.52 set on May 31. RBI made what traders described as a mild attempt to defend the currency early.