Rupee breaches the perilous 61/$ level on persistent month-end dollar demand

Indian rupee, prolonging its freefall, has yet again breached the perilous 61/$ level on persistent month-end dollar demand from importers and on the back of strengthening in the US currency overseas. Lingering doubts on whether the central bank can defend the currency with its existing cash-draining measures unless policy makers take additional steps is mainly hurting sentiment. Meanwhile, negative local equities also added to the pressure of Indian currency. On the global front, US dollar advanced slightly in the early trade as investors prepared for a statement on monetary policy from the US Federal Reserve, as well as the preliminary estimate of second-quarter growth for the world's largest economy.

The partially convertible currency is currently trading at 61.05, weaker by 57 paise from its previous close of 60.48 on Tuesday. The currency has touched a high and low of 61.20 and 60.83 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at Rs 59.82 and for Euro it stood at Rs 79.32 on July 30, 2013. While, the RBI’s reference rate for the Yen stood at 60.84, the reference rate for the Great Britain Pound (GBP) stood at 91.7582. The reference rates are based on 12 noon rates of a few select banks in Mumbai.