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Rupee weakens to a month low tailing frailed local equities and subdued euro

12 Jul 2011 Evaluate

Prolonging previous session’s descending trajectory, Rupee has weakened substantially to a week’s low on Tuesday on the back of the frailed local equities amidst weak regional counterparts and subdued euro. Persistent demand for the American currency from banks and importers in view of dollar firmness in global markets has also pressurized the local unit. On the global front, the euro fell to a four-month low against the dollar after new IMF managing director Christine Lagarde said the fund is not yet ready to discuss conditions or terms of a second Greek bailout and that Italian economic growth had to improve to restore confidence.

Meanwhile, the Index of Industrial Production (IIP) with base 2004-05 for the month of May 2011 has declined to 5.6% to 165.3 as compared to the level in the month of May 2010. The cumulative growth for the period April-May 2011-12 stood at 5.7% over the corresponding period of the previous year.

The partially convertible Rupee is currently trading at 44.69, weaker by 21 paise from its previous close of 44.48 on Monday. It has touched a high and low of 44.70 and 44.59 respectively. The Reserve Bank of India's reference rate for the dollar stood at 44.37 and for Euro it stood at 62.9578 on July 11, 2011. While, the RBI's reference rate for the Yen stood at 54.93 and the reference rate for the Great Britain Pound (GBP) stood at 70.8375. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP
July 11,2011 44.3705 70.8375
July 08,2011 44.3270.7448

(RBI-Reference Rate)

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