Indian Rupee Hits 32-Month Low

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MUMBAI – The Indian rupee fell more than 0.8% on Tuesday to its weakest level in nearly 32 months as dollar demand from importers remained strong and worries over Europe’s debt crisis kept the euro under pressure. At 11.10 am, the partially convertible rupee was at 50.58/59 per dollar, after hitting 50.71, its weakest since March 31, 2009. It had closed down 0.3% at 50.285/295 on Monday.

“It is possible that the rupee could move towards 51 given the fact that the support at 50.65 did not hold strong and the euro also seems to be heading lower,” said Hari Chandramgathan, a senior foreign exchange dealer with Federal Bank.

Exporters are unlikely to provide much support for the rupee at current levels given the likelihood of further weakness in the short term. “Even the exporters know they could get better levels if they wait for some more time. So there are no positive for the rupee from that side,” said a senior foreign exchange dealer at a state-owned bank.

The euro was at $1.3608, down from $1.3664 at end of rupee trade on Monday, while the index of the dollar against six major currencies was at 77.605 points from 77.304 points previously.