Thursday, the Indian rupee plunged to a 2-day low against the U.S. dollar despite a better-than-expected India's industrial output report for September.
India's factory output grew at a faster-than-expected 9.1% in September as against 6 percent in the year-ago month, government data showed today.
For the first six months of the current fiscal year, industrial growth was up by 6.5 percent compared to 5.0 percent in the year-ago period. Annual industrial growth for August has been revised upwards to 11 percent from 10.4 percent.
Today's data justifies the central bank's unwinding of economic stimulus. The Reserve Bank of India took a first step to tighten monetary policy on October 27 by ordering lenders to invest a greater proportion of their deposits in government bonds.
At 4:25 am ET, the rupee touched a 2-day low of 46.64 per dollar, compared to an early Asian session's new multi-week high of 46.1050. If the Indian currency weakens further, it may target the 46.77 level. The dollar-rupee pair closed yesterday's New York session at 46.4050.