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Indian rupee hits three and half months low

24 Apr 2012 Evaluate

Indian rupee lost against American currency and is trading close to its three and a half month low on strong dollar demand from banks and importers. Rupee is likely to trade weak in the near-term as issues like low capital inflows and high current account deficit are expected to take their toll. Meanwhile the current account deficit (CAD) is likely to touch 4.3% of GDP in FY12 compared to 2.6% in FY11, balance of payment (BoP) is likely to turn negative for the first time in the past three years in FY12. Investors are waiting for central bank’s intervention to limit further rupee downfall.

The partially convertible currency is currently trading at 52.78, weaker by 26 paise from its previous close of 52.52 on Monday. It has touched a high and low of 52.87 and 52.65 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 52.22 and for Euro it stood at Rs 68.83 on April 23, 2012. While, the RBI's reference rate for the Yen stood at 64.27 the reference rate for the Great Britain Pound (GBP) stood at 84.1600. The reference rates are based o n 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP

April 23, 2012

52.2284.1600

April 20, 2012

51.99 83.5398
(RBI-reference rate)

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