MUMBAI – India’s rupee traded mostly down against the dollar on Tuesday, at near record lows, even as the country’s central bank was likely to have intervened to prop up the ailing currency, analysts said.
The partially-convertible rupee fell to a day’s low of 57.2 to the dollar, leading to a suspected intervention by the Reserve Bank of India (RBI) by selling dollars.
The local currency clawed back to 56.95 but analysts do not expect a near-term revival for the rupee, which has lost more than a quarter of its value in the past 12 months and is currently Asia’s worst-performing currency.
The rupee hit a new record low of 57.32 to the dollar last week.
“There was a small (RBI) intervention in the markets. They are also trying policy measures but these are not strong enough,” said Abhishek Goenka, chief economist with India Forex, a consultancy firm.
The RBI has a policy of not commenting on movements of the forex market and has a stated policy of intervening only to curb volatility.
Analysts are disappointed with several measures which the RBI announced a day earlier to boost the rupee — including raising the limit on foreign investment in government bonds — which have failed to boost market sentiment.
Concerns over the eurozone debt crisis persist and several domestic problems, including India’s widening trade and current account deficits, and declining foreign fund inflows are keeping the rupee depressed, analysts said.
There has also been pressure from oil importers, who exchange rupees for dollars when they buy crude for energy-scarce India, which imports four-fifths of its crude oil needs.