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Indian rupee falls to new low on Monday
August 19, 2013, 4:43 am

The Indian Prime Minister Manmohan Singh said in his Independence Day address to the nation on 15th August that “slow growth won’t last long” [AP Images]

The Indian Prime Minister Manmohan Singh said in his Independence Day address to the nation on 15th August that “slow growth won’t last long” [AP Images]

The embattled Indian rupee fell over 1 per cent to hit a fresh low of 62.35 against the dollar on Monday.

The rupee had closed at 61.65 against the dollar on Friday.

The central bank on Wednesday announced measures to stem the rupee slide like restricting overseas investment and banning the import of gold coins.

The Reserve Bank of India is now widely expected to bring down rates to drive growth.

Currencies in emerging markets have tumbled amid fears that the US Federal Reserve will start tapering its fiscal stimulus by September.

The Brazilian real also fell to a fresh four-year low against the dollar last week.

The real has declined 15.3% against the dollar in the past three months compared to the 11.2% of the rupee.

The Indian Finance Minister P. Chidambaram urged people on Friday “not to spread panic” about the Indian economy.

He tried to assure investors that the situation in the US economy has no relevance to the Indian market.

“We must remember that the jobless claims in the US, if they have come down or gone up, have really no relevance of impact on the Indian economy. If fewer people are waiting for jobs in the US or a few more people are waiting for jobs in the US, how does it effect the funadamentals of India’s economy. It doesn’t. I though that is elementary,” he said.

“Nevertheless markets react to these signals that come out of the US. They reacted in the same way on May 22 when Mr Ben Bernanke made a statement. They reacted in the same way to the jobless claims numbers in the US,” he added.

The Indian economy is slated to expand 5.5% in the year through March 2014, compared with 5% in the previous 12-month period, according to the central bank of India estimates.

The Indian Prime Minister Manmohan Singh said in his Independence Day address to the nation on 15th August that “slow growth won’t last long”.

India will kick-start a number of new infrastructure projects including 8 new airports and two new sea-ports in the coming months to boost sluggish economic growth, Singh had announced.

In the last nine years, the economy has grown at an annual average rate of 7.9 per cent, slowing down currently to just over 5%.

 

Source: Agencies

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