The rupee was trading at 54.87 against the dollar at 10.50 am IST. Dealers say there was month end demand from oil importers, though dollar inflow from FIIs helped the rupee.
The rupee which had gained following reform measures by the government earlier this year failed to maintain the momentum. Falling exports and heavy demand from oil importers has put pressure on the rupee.
Heading into new year a lot would depend on foreign fund flow and reform measures to help sustain the rupee at the current levels.