Indian currency hits another record low

The Indian rupee hit another record low against the US dollar on Tuesday, signifying that the economy is in deep trouble, the forex officials said. The Forex officials said the rupee declined to 64.11 against a US dollar, adding that this was the lowest value for the rupee recorded recently. The rupee stood at 63.69 against a US dollar on Monday, an official said. Expressing concern over the devaluation of the rupee, the times of India reported that it was due to the rush of capital out of India, which has triggered the fall, has raised the prospects of inflation, growth falling below 5 percent, and higher interest rates. The Forex dealers said the main cause of the rupee hitting a new low is lack of Foreign Direct Investment (FDI) reforms and also fears that traders would de-invest from India and invest back in the US where the economy has begun to show improvement. In a bid to provide support to the flailing rupee, India's central bank institution, the Reserve Bank of India, has undertaken immediate measures. The bank put in place restrictions on Indian firms' investment abroad and also on outward remittances by resident Indians. The Indian authorities also announced some new measures to control the foreign exchange outflows to prevent the rupee from falling further.