The Rupee slipped to 56.22 intra-day as euro fell to 20-mth low against dollar on Greek exit fears
Domestic currency fared worst among Asian losers as traders felt weak macroeconomic indicators made the rupee more vulnerable
Forward market quotes indicate rupee could slide to 58 in six months, or beyond 59 in a year.
With the rupee breaching the 56-level against the dollar, chief economic advisor Kaushik Basu said on Wednesday the exchange rate problem is a “bit of a bubble” and has nothing to do with domestic policies. “The current exchange rate problem that you are seeing…the very sharp depreciation that is taking place…I don’t think it really has anything to do with our policy or policy mistakes being made over here, which is causing that,” Basu said.He pointed out that currencies of several emerging economies — like South African rand, Brazilian real and Mexican peso — all are moving very much like the rupee. The CEA also said that the rupee is not the worst performing currency. “The exchange rate problem that you are seeing is probably a bit of a bubble. I do think it’s a bubble but it’s not an India specific bubble. There is something global going on,” he said.