Rupee falls to 57.30 against US dollar on growth concerns

Mumbai, June 22: The rupee fell way past the psychological mark of 57 for the first time to 57.30 against the dollar today on strong demand for the American currency from oil importers, increased capital outflows and concerns over slowdown in global economic growth.

Continuing its free fall, the rupee surpassed previous records in the five-day long losing streak and tumbled Re 1, over 1.6 per cent from previous close to 57.30 per dollar in mid-session trade on the forex markets.

The rupee has depreciated nearly 3 per cent so far this week, its biggest weekly fall since September 23. The US dollar has also gained against the euro and other major currencies in the overseas forex markets amid global economic growth concerns, Moody's downgrade of world's 15 biggest banks and mounting worries over eurozone debt crisis including the size of a bailout needed to save Spain's banks.

Besides, the US Federal Reserve has lowered growth forecast for this year from its April projection. Also, Fitch Ratings has cut India's credit-rating outlook to negative this week, joining Standard and Poor's move, signalling that the country is at risk of losing its investment grade status.

The Reserve Bank of India also decided to keep all key interest rate unchanged, dampening industry as well as investor mood, adding to the pressure on the rupee.

After opening lower at Rs 56.80 against the dollar today, the rupee recovered partially to 56.76 before slipping again. It had gained from its low levels yesterday to close at 56.30.

Forex dealers said intervention by RBI and heavy selling of dollar failed to check the rupee's free fall. Meanwhile, the BSE benchmark Sensex was down 213.18 points, or 1.25 per cent to 16,819.38 at 1251 hrs on all-round selling.

PTI