Mumbai: In a roller-coaster ride, the rupee plummeted to life-time low levels in 2011 due to a slew of factors such as unrelenting demand for the dollar, the worsening domestic economic scenario and sustained capital outflows. The domestic currency started the year on a strong wicket and was trading at 44.76 to the dollar in January. In the second part of the year, there was panic reaction in the inter-bank foreign exchange market after
cracks started appearing in the Eurozone. Towards the end of the year, the rupee fell to its all-time low of to 54.30 on December 15, much to the worries of policy makers. On the last day of the year (December 30) the rupee closed 53.10 to the greenback, down over 18 percent from the first day of the year. Traders attributed the sharp fall to investors rushing to buy dollars as there were no sign of easing in eurozone crisis. They said dollar's increased appeal as a safe haven, especially in times of crisis, generated much demand. The trouble for the local currency became intense when on worries of economic growth came to the fore along with fears of a higher government borrowings which is budgeted at Rs 4.17 trillion. Read Full: 2011, a disastrous year for the rupee
