For the first time ever, the Indian rupee slipped below 62 against the dollar. The partially convertible rupee dipped to a new record low of 62.03 against the dollar at inter-bank foreign exchange market, surpassing its previous record low of 61.80 hit on August 6, 2013. The rupee was quoted at 61.65. The depreciation of the rupee came despite a series of measures announced by the government to control current account deficit (CAD), a key reason seen behind the currency market volatility.
The Reserve Bank of India unveiled rules to restrict foreign investments of private individuals and companies and announced additional curbs on gold imports. “While fully being cognizant of the situation on the current account balance front, which has prompted the RBI to impose cap on outward investment. This would be a dampener to India’s global aspirations. To stabilise the rupee, it would have been more appropriate to initiate policies which prevent influx of non-essential imports such as coal and iron ore and augment forex inflows,” said Chandrajit Banerjee, director-general, Confederation of Indian Industry (CII).
