India's rupee largely down despite likely bank intervention

India's rupee traded mostly down against the dollar on Tuesday, at near record lows, even as the country's central bank was likely to have intervened to prop up the ailing currency, analysts said.

The partially-convertible rupee fell to a day's low of 57.2 to the dollar, leading to a suspected intervention by the Reserve Bank of India (RBI) by selling dollars.

The local currency clawed back to 56.95 but analysts do not expect a near-term revival for the rupee, which has lost more than a quarter of its value in the past 12 months and is currently Asia's worst-performing currency.

The rupee hit a new record low of 57.32 to the dollar last week.

"There was a small (RBI) intervention in the markets. They are also trying policy measures but these are not strong enough," said Abhishek Goenka, chief economist with India Forex, a consultancy firm.

The RBI has a policy of not commenting on movements of the forex market and has a stated policy of intervening only to curb volatility.

Analysts are disappointed with several measures which the RBI announced a day earlier to boost the rupee -- including raising the limit on foreign investment in government bonds -- which have failed to boost market sentiment.

Concerns over the eurozone debt crisis persist and several domestic problems, including India's widening trade and current account deficits, and declining foreign fund inflows are keeping the rupee depressed, analysts said.

There has also been pressure from oil importers, who exchange rupees for dollars when they buy crude for energy-scarce India, which imports four-fifths of its crude oil needs.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • The other side of Palawan Ellen Tordesillas, Contributor - The Inbox
    The other side of Palawan

    By Ellen T. Tordesillas Mention Palawan and what comes to mind are  Underground River and El Nido in the northern side of this richly-blessed province from its capital, Puerto Princesa. Three  weeks ago, we went to the southern side- in … Continue reading → …

  • What can void a new car warranty? James Deakin - Wheel Power
    What can void a new car warranty?

    "I was denied warranty once for changing my horn!" One very annoyed reader wrote. "I was told that placing a backup camera will void my warranty" said another. The others are best left in my private inbox as Yahoo! have a swear jar in the office that I do not feel like donating this week's pay to. Continue reading → …

  • Docu exposes destruction of PH marine resources VERA Files - The Inbox
    Docu exposes destruction of PH marine resources

    By Kiersnerr Gerwin Tacadena, VERA Files "Gutom (hunger)," Sen. Loren Legarda said is what’s in store for the Filipino people if destruction of the country's marine resources is not stopped. Legarda, chair of the Senate committee on Environment and Natural … Continue reading → …

POLL
Loading...
Poll Choice Options