Indian rupee hits a new record low

India's rupee fell to a new record low against the dollar early, as the greenback was boosted by another set of strong US economic data.

The rupee hit 61.16 to the US unit -- moving past its previous low of 60.76 hit on June 26 -- as Indian importers bought dollars.

The rupee has skidded lower as overseas funds pull out of emerging markets on investor expectations of a scaling down of the hefty US monetary stimulus and as India's domestic economic woes mount.

“Strong US economic data is driving the dollar up (and weakening the rupee),” said Param Sarma, chief executive with NSP Forex, a forex consultancy firm.

The Indian unit's tumble raises import prices of everything from oil and fertilisers to food staples such as pulses, stoking already high consumer inflation and causing hardship for India's poor millions.

“The government and central bank need to take immediate measures to tackle the situation,” said Abhishek Goenka, chief executive with IndiaForex, an advisory firm. Weak local share markets have put additional pressure on the rupee as overseas funds sell Indian stocks.

AFP