| Indian rupee falls against dollar |
MUMBAI The rupee fell due to oil-related dollar demand on Monday, ending 2012 with its second consecutive yearly fall, weighed down by a wide current account gap, the slow pace of financial reforms, and economic uncertainty at home and abroad. However, the rupee ended the year with an improved tone, recovering some 4.2 per cent from the record low of 57.32 touched in June, when investor confidence in the economy and the government were at their weakest.
The partially convertible rupee on Monday fell 22 paise to close at one-week low of 54.99 against dollar versus its previous close of 54.7550/7650.
Data released just as the market closed showed the country’s current account deficit widened to an all-time high of 5.4 per cent of GDP in the July-September quarter as export growth slowed more sharply than growth in imports, dragging the balance of payments into the red once again.
While challenges remain, investors are hopeful of a mild recovery in 2013, as the Reserve Bank of India (RBI) is widely expected to start cutting interest rates as early as January, helping the economy recover after growth fell below 6 per cent in 2012. “2013 should be a good year for Indian markets, including the rupee,” said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.
Reuters
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