Rupee pares all early gains on lower than expected IIP numbers

Wounded by lower than expected IIP numbers Indian rupee erased all its early gains and currently trading lower against dollar on Thursday. Local equities and likely dollar inflows were unable to hold the rupee gains. However growth in February industrial production (IIP) has come in at 4.1%, which is an improvement over the January number but lower than market expectation. Traders will now wait for some major steps from the central bank at the monetary policy. The rupee's position is clouded because of weak fundamentals, including a widening current account balance, slowing growth and high inflation.

The partially convertible currency is currently trading at 51.45, weaker by 3 paise from its previous close of 51.42, on Wednesday. It has touched a high and a low of 51.46 and 51.30 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 51.54 and for Euro it stood at Rs 67.56 on April 11, 2012. While, the RBI's reference rate for the Yen stood at 63.72 the reference rate for the Great Britain Pound (GBP) stood at 81.9494. The reference rates are based on 12 noon rates of a few select banks in Mumbai.