Rating worries, IIP drag rupee to 56-a-dollar mark again
12 Jun 2012
The rupee hit a low of 56.06 against the dollar in intra-day trading today, crossing the 56-mark against the dollar for the first time in more than a week, amidst rating worries and weak industrial production data.
The domestic unit, which opened at 55.85 against the dollar, however, closed higher at 55.80, still down 38 paise from yesterday's closing level.
The Indian unit, which had gained some strength over the past week, resumed its downward spiral on Friday and continued it till today.
The rupee's contraction comes in the wake of a mere 0.1 per cent increase in March industrial production and the threat by Standard & Poor's that India may lose its investment grade rating.
A rating downgrade could affect investment flows into the country and raise overseas borrowing costs for Indian corporates.
Meanwhile, call rates in the interbank money market opened higher at 8.2 per cent against yesterday's close of 8.1 per cent. The overnight borrowing rate closed at 8.15 per cent.
The benchmark 8.79 per cent government bond maturing in 2021 opened at Rs103.05 and rose to Rs103.33 before closing at Rs102.95, at a yield of 8.27 per cent.
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