Last week rupee hit almost lifetime low of 59.93 against a dollar. This is really a negative news for Indian economy. There are so many reasons for this weak rupee or fall of rupee against dollar. One of the main reason is dollar is very much in these days and thus almost all other currencies from various countries fell down very badly. So not only rupee, but also other global currencies like Japanese Yen and other currencies like Euro, pound all were fell down.
The other reason of rupee fall is many foreign institutional investors (FIIs) have sold their positions in the Indian bond market, and because of huge selling pressure in the bond market, rupee falls. The sentiment is more negative and thus outflow also have started from the equity market. FIIs are selling their positions from equity or cash market also. Because of these overall activities, rupee as well as our Share market under tremendous pressure.
However RBI has intervened many times to support of further fall of the rupee. RBI does various measures to try to stop rupee further falling. One of such process is RBI sells dollar currency through PSU banks. Again RBI and finance ministry has initiated various guidelines on import of Gold. Because of increase in gold import, it affects our currency rupee as well as country's current account deficit also increases.
With Best Regards,