The rupee fell on Thursday, coming close to a record low against the dollar, as risk assets fell on disappointment about the scope of US Federal Reserve’s bond purchases and after HSBC factory data from China showed a contraction.
Traders are on watch for any potential intervention from the RBI to defend the currency.
At 9.06 am, the rupee was at 56.34/38 to the dollar versus its 56.15/16 close on Wednesday. It fell to 56.45 in early trade, close to its record low of 56.52 hit on May 31. Increased demand for the American currency from importers and a weak opening in the local equity market also put pressure on the rupee, traders said. They added dollar gained against euro in overseas markets on concerns that Spain’s troubled banks may need a bigger bailout.
The rupee had ended lower by 19 paise at 56.15 against the dollar yesterday as importers bought dollars in late trade.