The Indian rupee looks set to surpass the record low of 61.21 against the U.S. dollar hit on July 8. The partially convertible currency declined to 61.16 in early trade on Tuesday against Monday's close of 60.88/89.
Fresh weakness in the rupee came even as the dollar dipped against a basket of major currencies. The rupee traded at 61.12 as of 09.10 a.m.
The prospect of further rupee falls is leading traders to expect additional measures from the RBI. Standard Chartered Bank expects the RBI to announce more measures to tighten cash conditions if the improvement in cash situation continues.
Traders broadly expect the pair to hold in a 60.50 to 61.50 per dollar range during the holiday-shortened week. Financial markets will be closed on Friday for a religious holiday.
In the offshore non-deliverable forwards (NDF), the one-month contract was at 61.47 while the three-month was at 62.34.
Jamal Mecklai of Mecklai Financials told NDTV that the NDF market or the currency futures market is not a major driver of the Indian currency. The government and the Reserve Bank should instead focus on growth, he added.
(With inputs from Reuters)
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