Falling for the fourth straight session, the rupee on Friday fell 12 paise to a 11-month low of 56.50 against the US dollar, weighed down by a fall in the stock market triggered by weak gross domestic product (GDP) numbers.
“Throughout the week we saw the rupee weakening against the US dollar and surpasseding the key levels of 56-56.20,” said Abhishek Goenka, chief executive officer India Forex Advisors. “We continue to maintain our bearish bias on the rupee and expect it to move towards 57-58 levels.”
The rupee commenced lower at 56.50 from its previous close of 56.38 at the Interbank Foreign Exchange (Forex) market. A sharp fall in stocks, Reserve Bank of India’s (RBI’s) poor inflation outlook and GDP falling to decade’s low pushed the rupee downwards to 56.76 — its lowest since June 28, 2012.
Dollar demand related to defence payments and month-end imports also hurt rupee, forex dealers said. However, there were no reports of RBI intervention, they added.
The Indian currency has declined 5 % in May, posting its worst monthly fall since May 2012, and was the worst performer among Asian currencies during the month.