SME Times News Bureau | 31 May, 2013
The Indian Rupee declined by 20 paise to hit one-year low of 56.58 against the US dollar in early trade today at the Interbank Foreign Exchange.
Increased demand for the American currency from importers put pressure on the rupee.
The rupee had lost 21 paise to end at new 10-month low of 56.38 against the dollar yesterday on fag-end spurt in dollar demand after RBI Governor hinted that the central bank would not cut rates in its June policy review.
Recently, the RBI had said it would continue to take steps to check excessive volatility in the currency market.
RBI Executive Director G. Padmanabhan said that RBI had decided in principle to allow exporters and importers to rebook and cancel up to 50 per cent of their total hedged exposure from the present cap of 25 per cent.
Simplifying the documentation for booking of forward contracts up to $200,000 is also under consideration of the central bank.
Meanwhile, yesterday RBI tightened asset restructuring rules for banks after the weakest economic growth in a decade prompted a surge in bad loans.
The new rules include raising capital requirements and forcing banks to seek personal guarantees from controlling shareholders of companies whose loan terms are eased.
