Rupee sinks to record low of 57.76 against dollar

The Indian rupee breached its all-time low of 57.32 against dollar in early trade on Monday. It traded at 57.69 against Friday's close of 57.06/07 as of 10.36 a.m. The Indian currency had earlier hit a low of 57.76 against the greenback.

The rupee has been falling sharply since the start of May on concerns that the U.S. Fed may withdraw its monetary stimulus and the Reserve Bank of India may not cut rates as much as previously anticipated. (Read: Why the rupee is sliding against the dollar)

The rupee has been falling for five straight weeks, taking its losses since the start of May to 5.71 percent, to make it among the worst performing currencies in Asia during this period.

The rupee weakness threatened to pull down the stock markets, which after a strong start traded flat.

Deven Choksey, managing director of KR Choksey said given the negative trend on rupee and crude oil, equities too will have negative bias. In such a situation, the Nifty may trend down to 5,750-5,700 levels, he added.

The BSE benchmark traded up 22 points at 19,451, while the Nifty traded at 5,885, up 4 points as of 10.20 a.m. The Sensex had earlier risen as much as 150 points.

"The depreciation in the rupee is counterproductive for markets. It affects current account deficit and all the consequential issues that follow including the RBI policy. It lead to higher cost of production, higher commodity prices, high inflation and is suicidal for the economy," Mr Choksey added. (Read: How a weak rupee impacts you)


Bearish bets on the rupee have increased to their largest since late June 2012 as continuing worries about the country's current account deficit weighed on sentiment and as the unit came under pressure from importers' dollar demand.

Continued dollar buying from oil refiners, the largest buyers of dollars in the domestic currency market, has also been pressuring the rupee.

(With inputs from Reuters)