Rupee hits fresh record low of 58.36 against dollar

The Indian rupee hit a fresh low at 58.36 against the dollar in early trade on Tuesday. The currency traded at 58.3325 as of 09.05 a.m. against Monday's close of 58.15.

The sharp depreciation in the rupee has made the struggling economy further vulnerable as imports become costlier, inflation risks rise and record high current account deficit worsens.

The Indian rupee has depreciated nearly 8 per cent since May 1, making it the worst performing currency in Asia.

The Indian rupee will eventually weaken to cross the 60 mark against the dollar, global investment bank CLSA said on Tuesday. Market analyst Sarvendra Srivastava said the rupee-dollar setup looks scary and the local unit is on track to hit 62 against the greenback in 15-20 working days. (Read: Levels to watch on the rupee)

Traders will watch out for any RBI intervention to prevent the rupee from weakening further. The Reserve Bank has followed a hands-off approach towards the rupee, CLSA added.

Other analysts said the central bank can do little to prevent the sharp fall in the currency.

The Reserve Bank does not have enough dollar reserves and surplus rupee in the system to defend the rupee aggressively, Mr Harding said.