Indian Rupee Falls to Record Low

The Indian rupee fell to the record low level against the U.S. dollar today as the Asian stock markets followed the path of the U.S. equities and declined strongly; the recession forecasts for 2008 and the first half of 2009 also played their role.

Dropping more than 1.2 percent today, the Indian currency followed the decline in the local benchmark stock market index, SENSEX, by more than 4.3 percent. Sales of the Indian assets by the international investors were spurred by the 7-year largest drop in the exports in Japan and deflation of the consumer prices in U.S. in October.

The minutes of the U.S. Federal Open Market Committee latest meeting, released yesterday, showed that the Federal Reserve forecasts the recession in the U.S. in the second half of 2008 and the first half of 2009. This plays a big role for the Indian economy, which is largely dependent on the United States.

According to the currency analysts, the rupee is going to remain under the pressure for as long as the negative trend in the global stock markets remains there. The demand for the dollar isn’t working good for the emerging currencies, such as the Indian rupee.

USD/INR went up from 49.84 to 50.48 as of 8:23 GMT today after reaching its absolute record maximum at 50.55 during the early trading session.