RTTN:Indian Rupee Trades At 14-month Low Against Dollar
(RTTNews) - Monday, the Indian rupee fell below the 47.0 mark against the US dollar for the first time in more than a year as dollar strengthened amid renewed fears of Greece default. Slower-than-predicted domestic industrial production growth also dragged the domestic unit lower against its US counterpart.
Markets have been rattled by speculation that Greece will be unable to meet its debt obligations. It is feared that a Greek default will set off a chain effect among other euro zone nations that are coping with unsustainable high borrowing costs.
Extending losses for a second consecutive session, the Indian markets fell sharply after government data showed India's factory output growth grew at the slowest pace in almost two years in July.
The benchmark 30-share Sensex fell to a low of 16,393 in mid-afternoon trading before recovering slightly to end down 365 points or 2.17 percent at 16,502. The broader Nifty index on the NSE also ended off its day's low at 4,947, down 113 points or 2.23 percent from its previous close.
India's industrial production index rose 3.3 percent year-over-year in July, much slower than last year's 9.9 percent growth and expectations for a 6.1 percent increase, data released by the Central Statistical Office showed.
Despite the weak data, the Reserve Bank of India is widely expected to hike policy rates by 25 basis points when it meets to review policy on Friday.
The rupee reached 47.24 against the greenback, the lowest level since July 2010 and more than 1.5 percent drop from Friday's close of 46.525. On the downside, 47.50 is seen as the next likely target level for the Indian currency.
