Rupee continues downward slide

The rupee continued downward slide to new lows and touches 56.38 against the dollar on Thursday afternoon.

The rupee opened weaker on Thursday and fell to a new record low almost immediately on global risk aversion, with traders waiting for the impact of India’s petrol price hike on domestic equities for further direction.

Despite steps taken by the Reserve Bank to check the rupee’s downward slide, dollar’s gains against the euro and other major currencies in the overseas markets kept pressure on the Indian unit.

The rupee resumed lower at 56.20 per dollar against the on Wednesday’s closing level of 56 and dropped further to an all-time low of 56.38 per dollar.

Globally, the US dollar remained strong against a basket of major currencies with euro remaining under pressure as European Union leaders’ pledge of united fight against the debt crisis failing to impress investors.

Dealers said increased dollar demand from importers, especially oil refiners coupled with capital outflows from foreign funds kept pressure on the rupee value against the dollar even selling of the American currency by exporters and banks failed to check persistent fall.