Rupee in free fall, slips below 57 against dollar

Mumbai, June 22 (IANS) The Indian rupee hit a record low for the second consecutive day Friday and slumped below the psychological resistance level of 57 against a dollar for the first time on increased demands for the American currency by oil and gold importers.

The partially convertible rupee opened weak and hit a record low of 57.30 against a dollar in afternoon trading.

The rupee had closed at 56.30 against a dollar after hitting a record low of 56.57 in the intra-day trade.

This is the fifth consecutive day of slump in the value of rupee. The value of rupee has declined sharply since Fitch cut its outlook on India's sovereign ratings to "negative" from "stable".

Fitch has become the second credit ratings agency after Standard and Poor's to cut its outlook threatening India's investment grade ratings.

Both these agencies assign India the lowest investment grade.

In its mid-quarterly review of the monetary policy announced June 18, the Reserve Bank of India also disappointed the markets by keeping interest rates unchanged.

RBI Governor D. Subbarao said early this week that the central bank would intervene in the currency markets only to contain volatility of rupee.