Continuing its falling streak for the sixth straight day, the rupee depreciated by 11 paise to trade at almost nine—month low of 62.07 against the dollar in early trade on Thursday at the Interbank Foreign Exchange due to sustained demand for the American currency from importers.
The weakness in the rupee is bad news for importers, who will have to pay more money to bring raw materials in to the country.
It is also bad news for the economy because India runs a current account deficit
The dollar has gained over 7 % over the last four months, but the rupee has held on to the 58-62/dollar range because of the over 30 % fall (since late June) in crude prices and continued restrictions on gold imports. These two factors have led to a substantial drop in India's import bill and have supported the rupee.
Most global currencies are weakening because of economic slowdown. In Japan, where the economy has slipped into a recession, the yen hit a seven year-low against the dollar yesterday. The euro has also weakened against the dollar.
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