Rupee depreciates against dollar despite better than expected IIP numbers

Indian rupee after opening in positive territory has now reversed all gains against dollar in the late morning session. Following the recovery in local equity market, rupee bounced back from lower levels but dollar strength against other currency overseas capped the gains. Meanwhile, India's industrial output grew 2.7% in August 2012, after barely growing in July, indicating weak domestic and global demand. Better IIP numbers failed to impress the domestic currency as weakening global sentiment along with a rising current account deficit will be hurdles for next rate cut by central bank.

The partially convertible currency is currently trading at 52.73, weaker by 6 paise from its previous close of 52.67 on Thursday. The currency, so far, has touched a high and low of 52.88 and 52.56 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 53.07 and for Euro it stood at Rs 68.2365 on October 11, 2012. While, the RBI’s reference rate for the Yen stood at 68.06 the reference rate for the Great Britain Pound (GBP) stood at 84.9486. The reference rates are based on 12 noon rates of a few select banks in Mumbai.