Rupee hits one week low against dollar

Hurt by lower domestic equity markets Indian rupee hits one week low against American currency on fresh worries over the worsening debt crisis in Europe. Meanwhile, India's annual industrial output growth measured by index of industrial production (IIP), showed a negligible growth of 0.1% for the month of April 2012 versus a contraction of (-) 3.5% in March, but remained way below the street expectation. However, investors were on selling spree amid Standard & Poor's warning that India is likely to be the first BRIC nation to lose its investment grade rating. Investors were also cautious as Spanish bonds fell yesterday on fears that bailout for its banks will not suffice to avoid the European contagion from spreading. Demand for dollar from some banks and oil company’s also pressurized the local currency.

The partially convertible currency is currently trading at 56.00, weaker by 26 paise from its previous close of 55.74 on Monday. It has touched a high and low of 56.05 and 55.75 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 55.23 and for Euro it stood at Rs 69.82 on June 11, 2012. While, the RBI’s reference rate for the Yen stood at 69.42, the reference rate for the Great Britain Pound (GBP) stood at 85.9345. The reference rates are based on 12 noon rates of a few select banks in Mumbai.