Indian rupee comes under further pressure

The already-weak Indian rupee fell Wednesday, once again breaching the 61 level on heavy demand for the U.S. dollar and domestic growth concerns. Resuming from previous day's lows of 60.47 to a dollar, the Indian currency dropped to over 61 on Wednesday. It came close to hitting the all-time low of 61.21 reached on July 8 before strengthening. A number of factors including dollar demand from importers, the dollar's strengthening in overseas markets and the latest Indian central bank's downward revision of growth forecast, all combined to bring pressure on the rupee. The rupee already had been weakening for two months largely due to current account deficits. Earlier this week, the Reserve Bank of India, in its quarterly monetary review policy, left all key rates unchanged and downwardly revised growth forecast for this fiscal year to 5.5 percent from its May estimate of 5.7 percent. The bank's governor said the "persisting weakness in industrial activity has heightened the risks to growth," and that global growth had been tepid with adverse spillovers on India's exports, manufacturing and services. "On the basis of the above considerations, the growth projection for the current year is revised downwards, from 5.7 per cent to 5.5 per cent," the bank said.