India's rupee slides to three-month-low
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India's rupee on Friday fell to its weakest level in three months against the dollar amid concerns over the nation's slowing economy and growing trade deficit.
The unit fell below the key 52 rupees to the dollar level, hitting an intraday low of 52.18 against -- a level last seen in January -- before recovering slightly to 51.99.
"Investors are moving from riskier assets to the dollar," said Naveen Mathur, associate director of commodities and currencies at Mumbai's Angel Broking.
The partially convertible currency has been hurt by global uncertainty, weak domestic economic data, falling share prices and pressure from oil importers who have to exchange rupees for dollars when they purchase crude.
Energy-hungry India imports around four-fifths of its crude oil needs to fuel its economy.
On Tuesday the central bank cut borrowing rates by a bigger-than-expected 50 basis points -- its first reduction in three years.
But concerns about India's widening trade gap -- which last year hit a record $184.9 billion -- and fiscal deficit offset any investor hopes that the rate cut could spur flagging economic growth, traders said.
Traders said there was no sign of intervention by the Reserve bank of India in the market to prop up the Indian currency, while bank has a policy of not commenting on rupee movements or confirming forex market interventions.
It intervenes only to prevent sharp volatility. The rupee -- Asia's worst performing currency in 2011 -- hit a record-low of 54.30 against the dollar in mid-December.
The Indian currency recovered to Rs 48.67 to the dollar in February led by strong foreign fund buying of Indian equities and debt, but then slid again as share prices softened.
Some market-watchers have warned that the rupee could test its mid-December low against the dollar in coming months as dealers absorb negative domestic data and a struggling global economy.
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