MUMBAI, August 27, 2013 (AFP) – India’s rupee fell to a new low Tuesday on fears over the country’s slowing economy and the impact of a new food programme for the poor on already strained finances. The rupee, like currencies of other emerging markets, has also fallen on fears of foreign fund outflows as the US economy picks up and the US Federal Reserve rolls back its stimulus programme. Asian shares and currencies were also hit on concerns over possible US military intervention in Syria.
The rupee, one of Asia’s worst-performing currencies this year, fell to a new lifetime low of 65.71 rupees to the dollar in morning trade, slipping past its previous low of 65.56 on August 22.
Finance Minister P. Chidambaram insisted at a news conference in New Delhi that India can finance the food bill at the same time as meeting its target for cutting its record current account deficit — the broadest measure of trade — whose level has unnerved foreign investors.
“We have done our sums — there is enough money to provide for the food security bill” and after that to meet the deficit target, “which is a red line that will not be breached”, Chidambaram said.
The food scheme, which economists sa