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Rupee drops 8 paise; trades at 55.06 to the dollar


Rupee drops 8 paise; trades at 55.06 to the dollar
The rupee dropped 8 paise in trade at 10.00 am IST, after having gained almost 4 paise at 55.92 in early trade.

The rupee broke its losing streak on Tuesday as firm equities helped support the currency. The rupee has been under pressure for several weeks now, despite the government announcing a slew of reform measures.

Dealers attribute the weakness to the rising current account deficit, which had reached a historic peak of 5.4 per cent of GDP in Q3 2012.

Rising imports, particularly crude and gold would continue to put pressure on the currency. The government is looking at ways to curb gold imports to reduce the current account deficit and support the rupee. However, the huge crude imports continue to pose a challenge, particularly since the international price of crude oil fails to cool-off.

Read more about: currency
Story first published: Wednesday, January 9, 2013, 10:12 [IST]
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