-ABS News Service-
The rupee fell to a new record low
of 58.53 versus the US Dollar
tracking weakness in most other
Asian currencies. Part of the reason for the fall is the strengthening of the
dollar as US cuts down on easement policy.
Rupee's continued weakness is
stoking fears that foreign investors may pare positions, also clouding expectations
for a rate cut by the Reserve Bank of India
at its monetary policy review on
June 17, dealers said
A sustained fall in the value of
the rupee would make the going even harder for Asia's third-largest economy,
which is growing at its slowest pace since 2003, as it would worsen the current
account deficit and endanger the fall
in inflation
as imports become costlier. An
immediate consequence, the market fears, is that RBI might not cut rates at its
mid-quarter review meeting on June 17.