Indian rupee hits record low

03-05-2009 15:23

Indian companies converted to dollars in order to finance the imported products which resulted in a decline of the Indian rupee against the dollar, approaching a record low-level. The Indian economy is confronted with more major risks than the other upcoming countries. The rupee dropped as global markets show a rather modest risk-aversion level today.

Rupee faces two major problems

Analysts believe that the weak rupee can be explained by the lack of domestic demand for the foreign currency and by the net sale of the Indian stocks by the foreign funds (with a total value of $1.8 billion this year). Due to this essential trend the rupee possibly will not be able to show a sustainable growth against the US dollar.