Rupee falls to a record low against the dollar

Currency dealer, Mumbai Overseas investors have been pulling money out of Indian shares and debt on concerns over the economy.

Related Stories

The Indian rupee has hit a record low against the dollar despite recent efforts to prop-up the currency.

On Wednesday India's central bank put further restrictions on the amount of money that companies and individuals can send out of the country.

That had little impact and the rupee fell to 62.03 to the dollar, below its previous low of 61.80 hit on 6 August.

Overseas investors have been pulling money out of Indian shares and debt on concerns over the economy.

According to official data, international investors have withdrawn $11.58bn in shares and debt from India's markets since the beginning of June.

Inflation fears

India's economy had been growing at a fast clip, reaching annual growth of 9%.

In recent months, it has seen a sharp decline largely because of a slowdown in its manufacturing and services sectors.

"There is a complete lack of faith in the markets. There are fears that the RBI (Reserve Bank of India) measures may not help improve the rupee," said Param Sarma, chief executive with NSP Forex.

Indian authorities are concerned that the weak rupee is stoking inflation.

The nation relies on imports of crude oil, chemicals and some foodstuffs, which are priced in dollars.

The weak rupee makes those more expensive, a cost that is eventually handed on to the consumer.

In July, India's main gauge of inflation, the Wholesale Price Index, was 5.79% higher than a year earlier, up from 4.86% in June.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • Witley Court in Worcestershire Abandoned mansions

    What happened to England's lost stately homes?


  • Tray of beer being carried10 Things

    Beer is less likely to slosh than coffee, and other nuggets


  • Spoon and buckwheatSoul food

    The grain that tells you a lot about Russia's state of mind


  • Woman readingWeekendish

    The best reads you need to catch up on


  • Salim Rashid SuriThe Singing Sailor

    The young Omani who became a prewar fusion music hit


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.