Rupee drops again; touches 55.97

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Rupee drops again; touches 55.97
The rupee dropped for the fourth day in a row, with the Indian currency trading at 55.97 to the dollar, just shy of the 57 range.

Persistent demand for the dollar, has led to the drop in the rupee. The currency has found demand from crude importers, who have to buy higher amounts of dollars, due to the sharp rise in crude oil over the last few weeks.

Foreign fund flows have also slowed down, adding to pressure on the rupee. On September 5, foreign funds net sold Indian equities, as per data released by the National Stock exchange. The month of September has thus far seen reduced flows from foreign funds.

Intervention from the Reserve Bank of India is also unlikely, unless there is a lot of volatility in the currency market. The currency is likely to track equity markets, which are eagerly awaiting the outcome of an European Central Bank meeting to be held later today.

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