The Indian Rupee (INR) has been on a downslide, and today fell to a new record low of 58.64 against the U.S. Dollar, following debt sales by foreign institutional investors. The Rupee has fallen 7.7 percent since May 1, 2013. Yesterday, it fell to INR 57.69 to the U.S. dollar, and until yesterday it was 11.5 percent below the strongest 12-month reading it stood at INR 51.74 to the U.S Dollar, in October 2012, reports say.

The consequences of the falling Rupee, for the Indian jewellery domestic market, could be stern. Recently the government had raised gold import duty from 6 percent to 8 percent in favor of reducing the country’s current account deficit and discouraging gold consumption in the domestic market. The fall in the Rupee could add further to woes, as imports would get costlier, cost of foreign borrowings would go up and lead to inflation, further impacting domestic demand, reports suggest. Although exports would be encouraged, but the same may not be enough to offset the negatives, reports add. Market fears are that the RBI may not cut rates at its mid-quarter review meeting this month.