NEW DELHI: The rupee hit a record low of 57.76 against the dollar on Monday rising worries about the country's rising current account deficit, even as dollar gained against major Asian currencies. The rupee hit a fresh record low of 57.76 as dollar gained following disappointing data from China and slightly better-than-expected US jobs data, fueling expectations that the Federal Reserve might curb its asset purchases later this year. According to analysts, foreign investors have been heavy sellers in recent weeks of Indian debt, which is worrisome for a country which depends heavily on foreign flows to finance its current account deficit and support its markets. "Weakness in rupee makes it harder to finance India's current account deficit and makes imports costlier for India," Reuters said in a report. According to analysts, the fall is largely triggered by broad gains in the dollar that is also hitting other emerging currencies such as the Japanese Yen over worries about a potential end to the U.S. stimulus programme. According to analysts, dollar's longer-term bullish outlook is expected to remain intact as the Fed will eventually start scaling down its stimulus if jobs keep on adding to its kitty. Most analysts expect dollar index to hit 88 levels by year-end and the outlook for rupee remains bearish with target of Rs 58-60 against US dollar. The US 10 year bond yield is inching up higher day by day on the confirmation by the US Federal Reserve on tapering the quantative easing (QE). This is ultimately making the US bond yield to trade above 2 per cent. "While on the other hand, the Indian Federal bond yield is trading lower at 7.2 per cent and is expected to lower down further as there is increasing speculation over RBI cutting the interest rates in near future," India Forex Advisors said in a report. "If that happens, this will further reduce the arbitrage opportunity for the foreign investors. As the returns drops, the more the pressure would exert on rupee," the report added.

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