The Indian rupee that reached an 8-week high of 49.20 against the US dollar in the Asian session on Monday reversed direction thereafter. The rupee dropped as low as 49.955 against the buck before leveling off in the succeeding session. If the Rupee slides further, 50.2 is seen as the next likely support level.
The Indian economic growth was slightly less than 7 percent in fiscal year 2008-09 because of the global economic crisis, reported the media, quoting Prime Minister Manmohan Singh. While addressing a televised news conference in Mumbai, Mr. Singh said that the global economy is in deep trouble and India also suffers from its impact. However, the impact of economic crisis is less compared to other economies.
Meanwhile, the former Reserve Bank Governor C. Rangarajan said that India's economy would recover in the second half of 2009 and would witness significant improvement in growth in fiscal year 2010-11. He also said that India's GDP would be slightly below 7% for the fiscal year 2008-09, close to the Central Statistical Organization's advance estimate of 7.1 percent in February.
He said that the global financial crisis, along with liquidity crunch, has made it difficult for Indian companies to borrow funds from global markets, apart from exerting pressure on the domestic banking system.
He also said that the measures taken by the RBI to ease liquidity has not reached the ground level and stressed the need for RBI to take further measures from time to time. The apex bank is scheduled to announce annual credit policy on April 21.
The Indian rupee has gained around 6.4 percent against the US dollar since it reached a record low in early March. The dollar-rupee pair is currently quoted near Thursday's North American session closing value of 49.81.
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