Rupee had set previous low of 98.05 against the greenback on Sunday.
The local currency depreciated against US dollar after Indian currency, with which rupee is pegged, plunged to record low of 61.80 against US dollar. The Indian currency had set previous low of 61.21 on July 8. [break]
Quoting local traders, Reuters said unless Prime Minister Manmohan Singh´s weak coalition government announces substantial reforms, or resorts to raising debt abroad to attract rapid capital inflows, the rupee is likely to fall further, putting further strains on the already sputtering economy.
India´s chief economic adviser Raghuram Rajan, who has been one of the prominent public faces at the finance ministry regarding rupee-related matters, will take the helm for a three-year term after Governor Duvvuri Subbarao´s term expires on September 4.
"The government and the reserve bank are working together to address these challenges. We do not have a magic wand to make the problems disappear instantaneously. But I have absolutely no doubt that we will deal with them,” Rajan told reporters after his appointment, according to Reuters.
Though Indian rupee fell to 61.80 against dollar during early trading amid strong demands for the greenback from importers, it settled to 61.37 by Tuesday afternoon.
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