New Delhi: European crisis is not letting the pressure to ease on the economies around the globe. Spain’s credit rating has been cut twice in the year. It has created panic in financial markets. With such changes in Europe, rate of dollar is expected to reach Rs 54. With the rating cut in few other countries as well, investors have become bearish in domestic stock markets.    

After India, Standard and Poor’s (S&P) has also downgraded Spain’s ratings by two levels. This is second occasion since January when the rating has been downgraded. In January, along with France few other countries’ ratings were also downgraded. S&P’s ratings on Friday have created panic in Asian financial markets. Indian stock market has also been affected by this. Sensex had also seen downward trend but it recovered afterwards and closed on 17134.29 points. 

With slowdown in economy, FIIs are also changing their approach. In last one week, FIIs have withdrawn Rs 1,880 crore from the stock market. 

With the changes in Europe, rupee is under constant pressure. On Friday as well, rupee opened 15 paisa weaker. But later on with fall in the demand for dollar, rates came to Rs 52.54. Rupee level is almost at par with the levels on Thursday. However, in last one week rupee fell by 1 percent.

According to the market experts, if the global scenario does not change, price of one dollar can go up to Rs 54. It is only after that the Reserve Bank of India (RBI) will intervene into the market. Dollar has already touched its highest levels of Rs 54.30 in December last year.

CEO of India Forex, Abhishek Goenka believes that the RBI is not in a position to intervene in the market because the forex reserves are still not at satisfactory levels. As well with growing imports, current account deficit is under lots of pressure. Hence, there is no chance that rupee will become strong in comparison to dollar. 

(JPN/Bureau)