India is not going to recover earlier growth rate during the first quarter of financial year 2013-14 as the rupee
hits 11 month low of 56.60 against US Dollar on Thursday. As per the market
report, this is the fourth straight session of decline for the Indian currency,
which has witnessed tremendous pressure amidst the strengthening of dollar.
Market experts have said that a sharp selloff in equities
weighed on the currency, which traded at 56.47 against the dollar at 09.19 a.m.
In addition, Sensex and Nifty also traded with over 0.6 per cent cut. Speculations
are rife that the rupee is a cause of concern and it's very likely to hit an
all-time low in coming days. In the extreme short term, the dollar looks
overbought and a correction to 55.33 can be expected. However, a breach of
57.30 is just a matter of time after which the rupee will go all the way down
to 59.
Talking about the current slowdown, D Subbarao, the governor
of Reserve Bank of India (RBI) has commented that inflation still being high
and concerns over the current account gap dented rate cut hopes and pressured
the currency. He further added that the RBI will take into account macro-economic
factors and "more importantly" the current account deficit for policy
decisions.
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