Rupee Off 6-day High Against Dollar
The Indian rupee erased morning session’s gains against the US dollar in the afternoon domestic trading on Tuesday, tracking weak equities as the Indian market reversed its early gains and fell for a third day.
The benchmark BSE Sensex reversed its early gains and ended down 109 points or 0.65 percent at 16,731 and the broader Nifty index fell by 37 points or 0.73 percent to 5,036.
India’s wholesale price inflation (WPI) increased 9.22 percent year-on-year in July, slower than the 9.44 percent growth recorded in June, data released by the Ministry of Commerce and Industry showed today. Economists were expecting a 9.2 percent annual growth. In July 2010, the inflation rate was 9.98 percent.
Finance Minister Pranab Mukherjee, meanwhile, said good monsoon will ensure moderation of inflationary pressure further in the coming months.
The Indian rupee depreciated by more than 0.6 percent against the US dollar to reach as low as 45.39 from early Asian session’s 6-day high of 45.1050. If the rupee weakens further, it may find target around the 45.50 level.
