The rupee on Thursday slipped to a yet another record low of 70.84 against the dollar in intra-day trade before staging a slight recovery to end the session at a fresh closing low of 70.73. While some of the weakness in the currency was attributed to dollar purchases by state-owned banks, dealers are somewhat perturbed at the fairly sharp fall in the currency over the last few days. For one, the dollar index \u2014 the Dollex \u2014 has not strengthened this week and was actually trading lower in the region of 94.52 on Thursday, down from 94.77 on Monday. Again, while foreign funds have been selling stocks, at $344 million across four sessions, the amount is not very large. In the bond market foreign investors remained net buyers for an amount of about $560 million till August 29. On Wednesday they bought bonds for a small amount. The rupee has now lost nearly 10% since January and is the third-worst performing currency in emerging markets. Forex expert Jamal Mecklai said it was possible the rupee could fall further and added companies would be advised to hedge their forex liabilities. \u201cIt\u2019s becoming difficult to assess the situation,\u201d Mecklai said. Meanwhile, the yield on the benchmark bond rose to 7.93%, 2 basis points (bps) over Wednesday\u2019s close of 7.91%. Ananth Narayan, professor, SPJIMR, noted that the global oil and emerging market context was murky and the elections were coming up. \u201cOur fiscal position will likely slip, and our banking system remains weak. As long as the rupee remains nervous, yields in the bond market will be under pressure to stay high as well,\u201d Narayan said. With the rupee inching toward the 71 mark, currency experts said companies had started hedging any residual unhedged forex exposures. Analysts estimate that more than 50% of the foreign exchange liabilities of the companies in the BSE 500 universe have a natural hedge in the form of forex revenues. Narayan said the Reserve Bank of India (RBI) now appears to be open to further rupee weakening. \u201cIndia\u2019s current account deficit (CAD) is expected at over $70 billion in FY19, and we are having to borrow foreign currency to fund our rising oil, electronics and other imports. A weaker rupee should help address our real effective exchange rate overvaluation and improve our CAD over time. While the RBI has ample currency reserves and policy instruments \u2014 including higher interest rates \u2014 to stave off panic, uncertainties remain,\u201d Narayan noted. Although economists highlighted that a calibrated depreciation was not too worrying, since it would help exporters compete efficiently, they concede it would make imports costlier and push up inflation. They expect the CAD to widen to around 2.7-2.8% of GDP in 2018-19 from 1.9% in 2017-18.The RBI said in its annual report on Wednesday that the CAD was expected to be largely financed by foreign direct investment flows.