Rupee drops again; hits 53.66

The Indian rupee opened weak once again on Friday, with the currency trading at 53.66 against the dollar. The currency is now close to its historic high of 54.31, hit during December 2011.

Persistent demand for the dollar from oil importers weighed on the rupee today. Marketmen believe that the Reserve Bank of India may intervene to stem volatility of the rupee. On Thursday the rupee hit a four month low against the dollar on demand from oil importers.

India's weakening economic fundamentals are also exerting pressure on the rupee. Marketmen believe that the rupee will continue to slide and is likely to break through its historic lows. Foreign fund inflows have also dried up, as FIIs were net sellers in equities in April, thus putting pressure on the rupee.

FIIs had in fact invested huge sums in excess of Rs 40,000 crores in the first three months of the current year, which had prevented the rupee from falling.

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