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Rupee depreciates against dollar on euro zone concerns

09 May 2012 Evaluate

The Indian rupee opened lower against dollar on Wednesday as euro zone concerns affected riskier assets. Dollar's gains against the euro and other currencies overseas on renewed euro zone worries, weak opening in the equity market and increased demand for the American currency from importers mainly pressurized the rupee. However, local currency’s fall is just a continuation of the manifestation of the balance of payments problem, as very large current account deficit and very little capital coming in at this point in time. Meanwhile euro fell close to a recent three-month low, on worries that political uncertainty in Greece and a French leadership change may undermine austerity plans key to tackling the euro zone's debt crisis.

The partially convertible currency is currently trading at 53.49, weaker by 37 paise from its previous close of 53.12 on Tuesday. It has touched a high and low of 53.64 and 53.44 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 52.85 and for Euro it stood at Rs 68.80 on May 8, 2012. While, the RBI's reference rate for the Yen stood at 66.12 the reference rate for the Great Britain Pound (GBP) stood at 85.44. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP

May 8, 2012

52.85 85.44

May 7, 2012

53.3486.09
(RBI-reference rate)

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