The relentless rout of the Indian rupee continued with the currency of the Asias third largest economy breaching the key level of 66.00 to the dollar on Tuesday, portending that its abysmal plunge to 70 is well nigh imminent.
The rupees steep plunge to a new all-time low of 66.24 from 64.30 on Monday was partly on fears over a US-led military strike in Syria, which could push oil prices higher globally, even as investors became more nervous over the astronomical cost of a new move by New Delhi to provide subsidised food to millions of Indians.
The inexorable dive of the rupee did little to cheer the bewildered non-resident Indians in the Gulf who are caught in a paradoxical situation with those who remitted the money over the past few weeks ruing over their loss as the fall of the currency continued unabated.
In 10 weeks or so, the partly convertible Indian currency lost 22 per cent of its value against the dollar-pegged dirham from just over Rs14 per dirham in May to Rs18.21 on Tuesday.
The new bout of alarm over Indias fiscal deficit in the wake of the $20 billion food security plan eclipsed an announcement by Finance Minister P. Chidambaram that the government had approved infrastructure projects worth $28.38 billion, a step aimed at reviving economic growth and shoring up investor confidence.
Despite Chidambarams promise on Tuesday that the government would meet its fiscal deficit target, the rupee plumbed new depths.
Business - Indian rupee in free fall
The rupees steep plunge to a new all-time low of 66.24 from 64.30 on Monday was partly on fears over a US-led military strike in Syria, which could push oil prices higher globally, even as investors became more nervous over the astronomical cost of a new move by New Delhi to provide subsidised food to millions of Indians.
The inexorable dive of the rupee did little to cheer the bewildered non-resident Indians in the Gulf who are caught in a paradoxical situation with those who remitted the money over the past few weeks ruing over their loss as the fall of the currency continued unabated.
In 10 weeks or so, the partly convertible Indian currency lost 22 per cent of its value against the dollar-pegged dirham from just over Rs14 per dirham in May to Rs18.21 on Tuesday.
The new bout of alarm over Indias fiscal deficit in the wake of the $20 billion food security plan eclipsed an announcement by Finance Minister P. Chidambaram that the government had approved infrastructure projects worth $28.38 billion, a step aimed at reviving economic growth and shoring up investor confidence.
Despite Chidambarams promise on Tuesday that the government would meet its fiscal deficit target, the rupee plumbed new depths.
Business - Indian rupee in free fall
