NEW DELHI – The Indian rupee fell to a record low against the U.S. dollar, forcing the Reserve Bank of India (RBI) to come to its defense, while bond yields surged, highlighting the vulnerability of a country dependent on capital inflows to fund its big current account deficit.
In 45 days, RBI comments accelerate dip in Indian rupee. The local currency commenced the day’s trade at an all-time low level of 61.19 against the dollar at the Interbank Foreign Exchange market and hovered in a range of 61.19 and 60.80.
Forex dealers said there was some dollar selling by public sector banks at the behest of RBI.
The rupee’s slide to an all-time low of 61.21 is sparking speculation about potential measures from the Reserve Bank of India, including providing a special window for oil companies to buy dollars.
The central bank will meet officials from oil companies, the biggest buyers of dollars in domestic markets, later on Monday to discuss their foreign exchange needs, two sources with direct knowledge of the matter told Reuters.
Meanwhile, Finance Minister Palaniappan Chidambaram is due to travel to the United States from Monday in a previously scheduled trip to drum up foreign direct investment, particularly in the infrastructure sector.
