Rupee falls to record low, trading below 62.80 per dollar

The rupee fell to a record low on Monday and looked poised for further losses, with a series of measures unveiled last week failing to stall its decline.

The currency fell as far as 62.85 to the dollar, breaching the previous low of 62.03 hit on Friday.

Some dealers are expecting further dollar selling by the RBI as well as other measures to prop up a currency that is down over 10 percent in 2013, making it the worst performer in emerging Asia.

Traders seemed unconvinced about the efficacy of steps unveiled last week to contain the current account deficit at 3.7 percent of gross domestic product (GDP) during the current fiscal year, sharply lower than the record high 4.8 percent in the previous year.

"Forex intervention will con

tinue by the central bank. Further measures are expected from the RBI but are unlikely to be effective. The rupee is expected to touch 63 in no time," said Param Sarma, chief executive at Brokerage NSP Forex.

The partially convertible rupee closed trading at 61.65/66 last week.

Finance Secretary Arvind Mayaram told the Economic Times that the government was not looking for now at taking further steps to tackle the rupee's fall, but wanted to watch the impact of its recent measures.

The rupee's tumble has fuelled expectations of more action from the Reserve Bank of India (RBI), which last week curbed outflows from companies and individuals, roiling stock and bond markets on Friday. Policymakers later stepped in to assuage nerves that the government was not looking at curbing foreign money outflows.

"Our primary concern is that the policy authorities still don't 'get it' - thinking this is a fairly minor squall which will simmer down relatively quickly with fairly minor actions," Robert Prior-Wandesforde, an economist at Credit Suisse, wrote in a note on Monday.

"If this remains the case, then a swift move to 65 against the U.S. dollar is probable, which in turn should help focus minds."

The rupee has been the worst performer in Asia since late May, when the U.S. Federal Reserve first signaled that it may begin tapering its monetary stimulus this year, sparking an exodus of cheap money from emerging markets worldwide.

source:http://in.reuters.com/article/2013/08/19/markets-rupee-dollar-idINDEE97I01R20130819