INDIA’S rupee resumed its downward trend against the dollar on Friday (August 30), after strong gains in the previous session, as dealers await GDP growth data and a statement from the prime minister on the ailing economy.
The rupee – Asia’s worst-performing currency this year – was at 67.37 against the dollar in morning trade, after closing at 66.55 on Thursday (August 29). However, it is much stronger than the record around 69 it touched on Wednesday (August 28).
The currency gained sharply on Thursday after the Reserve Bank of India (RBI) moved to lend it support by providing dollars directly to three major oil importing companies through a separate bank.
It was the latest in a string of measures by the RBI to try and stabilise the currency market, where the rupee has lost about a fifth of its value against the dollar since the start of 2013.
Attention turns to Prime Minister Dr Manmohan Singh later in the day who is expected make a statement after official growth data for the April-June quarter is released, with analysts predicting of another weak set of figures.
Investors want to hear Dr Singh’s plans to kickstart the sluggish economy, which is suffering decade-low growth – it expanded 5.0 per cent in 2012/13, compared with 9.3 per cent two years earlier -while government is also battling a gaping current account deficit.
He told parliament on Thursday that the country was faced “with a difficult situation”.
His job is made all the harder because of a plunging stock market and rupee caused by a huge outflow of foreign cash as investors bet the US Federal Reserve will soon wind down its stimulus programme.
In morning trade the benchmark Sensex index was up 0.54 per cent at 18,500.45, although it is down about five per cent this month.
