Rupee hit a new record low as consistent selling in the stock market kept dollar outflow pressure going. Meanwhile, a gaining greenback added downside to currencies across the globe with the Yen sliding to 28 year low.
The rupee dropped to 78/$ for the first time ever but this may not be end of the pain. Bloomberg reports that top forecasters see the currency falling to between 79 to 81 per dollar over the next few months.
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The rupee declined about 1.6% in May, the biggest drop among emerging Asian currencies as FIIs continued to pull out money. For the year so far foreign investors have withdrawn $24 billion from Indian stock markets. Also weighing on the currency is a widening trade deficit and pressure on the fuel import bill.