Rupee Falls to Record Low on Rate Cuts

The Indian rupee fell to the new record low level versus the U.S. dollar today as the foreign investors pulled out capital out of the country’s markets amid deepening of the global financial crisis.
The rupee has already dropped about 2.6 percent against the dollar this week. The country’s central bank cut the interest rate by 50 percentage points on Monday and additional 100 percentage points today, for the total of 150 percentage points — down from 9 percent to 7.5 percent.
The rupee leads the Asian currencies’ worst performers as the previous fastest depreciating currency, Korean won, recovered from the absolute minimum. Foreign investment outflow from the Indian equity markets was $9.84 billion this year through October 7 compared to $19.5 billion inflow last year.
According to analysts’ reviews, rupee remains extremely vulnerable among the other regional currencies, as the part of the foreign capital in the financial system of India is dangerously big. If crisis worsening continues, the rupee is bound to decline further.
USD/INR fell to its lowest value of 49.33 during the early trading today and is currently trading at 48.70 as of 7:46 GMT after closing at 47.71 yesterday.

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