RTTN: Indian Rupee Extends Downtrend Against Dollar
(RTTNews) - Friday, the Indian rupee extended its morning session's downtrend against the U.S. dollar during afternoon deals in India as the local stocks fell.
The BSE Sensex closed down 0.9 percent today as fears that poor rains would hit economic recovery and downbeat U.S. data soured investor sentiment.
The 30-share BSE Index closed down 142.36 points at 15,376.13 points, with 26 components losing. The 50-share NSE Index fell 0.76 percent to 4,569.85 points.
Currently, the rupee is trading at 48.37 against the dollar. If the Indian currency weakens further, it may likely target the 48.5850 level. The dollar-rupee pair closed yesterday's New York session at 48.02.
Reserve Bank Governor D. Subba Rao said the monetary policy became the first line of defense to combat credit crisis and that the crisis called for a greater co-ordination between monetary and fiscal policies, not only in India but around the world.
Speaking at the bank's Platinum Jubilee celebrations at Hyderabad Friday, he added that the first challenge is to manage the co-ordination between monetary and fiscal policies and the second challenge was defining the mandate of central banks and reforming the regulatory system, he went on.
He said that borrowing had prevented a dramatic drop in interest rates and there was need to manage short-term demand.
