Mumbai, Nov.22 (ANI): The Indian rupee depreciated by 58 paise to a lifetime low of Rs.52.73 per U.S. dollar.
An earlier report said that it had depreciated by 35 paise to a lifetime low of Rs 52.50 per US dollar in early trade on the Interbank Foreign Exchange on Tuesday on sustained demand for the American currency from banks and importers.
The drop against the dollar made imports, especially that of oil costlier, and sparking fears that it could stoke inflation and widen the country's fiscal deficit.
The domestic currency had tumbled by 81 paise to close at a nearly 33-month low of Rs 52.15/16 per dollar in the previous session on sustained dollar demand from banks and importers in the backdrop of an eight-session losing streak in the stock market and a deepening euro-debt crisis.
Meanwhile, the BSE benchmark Sensex recovered by 151.20 points, or 0.94 percent, to 16,097.30 in opening trade on Tuesday.inance Minister Pranab Mukherjee said the rupee's fall was a reflection of international economic uncertainty and added that an intervention by the Reserve Bank of India (RBI) would not help much at this stage.
"We expect there will be a self correction in the market," Mukherjee told reporters.
Importers, especially oil companies, are now jumping in to buy dollars on fears that the rupee could slide further and make imports costlier.
The RBI, which usually steps in to curb volatility in the currency, has not done so yet.
The Deccan Herald quoted Subir Gokarn, Deputy Governor of the RBI, as saying that the central bank was weighing its options.
"We don't have a target or a rate in mind, the rupee is moving according to market dynamics. It's disruptive, there is no question," said Gokarn.
He added: "There's an impact on companies and it's a problem. But, any action we take now, if any, has to take into account the fact that these actions might have consequences further down the road. So, we've got to balance out actions now with the risks of potential increases in vulnerability later." (ANI)
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