Rupee dips to record low of 54.42 against dollar
rupee slumped to a record low of 54.42 against the US dollar
Wednesday due to rising concern over fiscal deficit and poor
economic outlook coupled with weak global cues.The partially
New Delhi: The
government is planning to introduce some austerity to aid fiscal
consolidation, Finance Minister Pranab Mukherjee said Wednesday as
the rupee slumped to a record low of 54.50 against the dollar and
stock markets tumbled.
Mukherjee said he would take austerity measures to bring more
fiscal discipline and send a right signal to the market.
"I am going to put in some austerity measures. It is important to
send a right signal," Mukherjee told lawmakers in the Rajya Sabha.
The Indian rupee took a severe beating and dipped to a record low
of 54.50 against a US dollar. Rupee has weakened almost 10 percent
This is the weakest level of rupee recorded so far. The earlier
record low of 54.30 to a dollar was hit in mid-December last year.
The partially convertible rupee also hit a record closing low of
54.49 to a dollar. The rupee had closed at 53.78 against a dollar
Blaming the eurozone crisis for the economic slowdown, the sharp
drop in the stock markets and rupee, Mukherjee asserted that
India's growth story was intact and the government was taking
measures to revive growth and attract overseas investments.
"Yes, we are concerned that our GDP growth has come down. It will
be 6.9 percent in 2011-12, some are saying that it might be even
low," Mukherjee said.
Replying to a debate on the Union Budget 2012-13 in the Rajya
Sabha, Mukherjee said slowdown in economic growth was a matter of
concern but there was no need to press the panic button.
"India's growth story is intact," he said.
After the debate, the Rajya Sabha, the upper house of Indian
Parliament, Wednesday returned the Appropriation Bill and Finance
Bill, 2012, to the Lok Sabha.
Mukherjee said crisis in the eurozone, especially in Greece, was
causing uncertainty in India and other developing countries as
"India cannot ignore the global economic situation," Mukherjee
said while referring to the plunge in stock markets.
The finance minister emphasised that he was not trying to pass on
the blame to someone else.
"Don't think that I am trying to pass on the buck elsewhere. The
buck stops at me, I agree. I am owning the responsibility... but
we shall have to keep in mind that this is a difficult world," he
Continued sell-off by the foreign institutional investors led to
almost two percent slump in the country's benchmark indices.
The benchmark Sensex of the Bombay Stock Exchange slumped below
16,000-point mark Wednesday. The Sensex closed 1.83 percent down
at 16,030.09 points.
The wide-based Nifty of the National Stock Exchange also closed
1.71 percent down at 4,858.25 points.
Referring to Vodafone tax row, the finance minister said he
welcomed foreign investments but would not allow the country to be
a tax haven.
"Yes, I want FDI, I have taken a series of measures to FDI
(Foreign Direct Investment) and FII (Foreign Institutional
Investment)," he said.
Later, talking to reporters, Mukherjee said he has directed
officials in his ministry to look at what could be done to bring
more fiscal discipline.