Tuesday, 27 August 2013

Dollar at 66 Sensex down by almost 600 points

Rupee plunged to an all-time low of 66.07 on Tuesday and shares slumped nearly 2 per cent after the lower house of Parliament approved a nearly $20 billion plan to provide cheap grain to the poor, raising concerns the country's fiscal deficit will blow out even further.

The rupee posted its biggest single-day decline in 23 months, falling as much as 66.07 against the dollar led by strong month-end dollar demand from importers and a weak opening in the domestic equity market.

At 01:50 p.m.; the partially convertible rupee was trading at 65.97, down 167 paise, against its previous close of 64.30 on Monday..

Finance Minister Palaniappan Chidambaram said on Tuesday the government would stick to its fiscal deficit target for the year, while announcing cabinet approval of power and infrastructure projects worth 1.83 trillion rupees ($28.38 billion).

Yet the comments failed to sway investors, with market watchers sceptical about India's ability to attract funds for infrastructure projects in an economy growing at a decade low of 5 per cent.

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