Now, rupee woe for centre, RBI

MUMBAI: The rupee, which fell to a new low of 50.91 against the dollar on Thursday, has opened up a new front for the government and RBI, which are already battling macroeconomic issues like inflation, economic slowdown and a burgeoning deficit.

With the domestic currency slipping 17 paise from its previous close of 50.74 against the dollar and showing no signs of stabilizing, the central bank took a series of measures to break its fall. The rupee fell alongwith other Asian currencies and also took cues from the stock market, where the sensex fell 314 points.

A weaker rupee deepens inflationary pressures as it makes all imports more expensive . It also worsens the fiscal deficit for as long as the centre chooses to absorb the higher rupee cost of crude and not pass them on through a diesel price hike. The Indian rupee has fallen over 12% in 2011 and has been the worst performer among all Asian currencies.