The rupee closed at a new provisional record closing low of 53.9750 to the dollar as global risk aversion spiked and as higher-than-expected domestic inflation data hit stocks by lowering expectations for future rate cuts.
The rupee came very close to falling below the psychologically key 54-level and ended not far from the record low of 54.30 hit in mid-December.
The previous all-time low that the currency ended on was on May 10, when it closed at 53.83 to the dollar. The decline had prompted the Reserve Bank of India to step in and announce measures to curb the fall. One such was the directive to exporters to convert 50% of their foreign currency holdings to rupees.
The apex bank had also stipulated that exporters would be allowed to buy foreign currency only after utilising all the foreign currency holdings in their accounts.
