Rupee set to breach lifetime low; slides 44 paise

The rupee dropped sharply by 44 paise and was trading at 54.23 to the dollar at 9.40 am IST, very close to its historic low of 54.30.

Weak equities markets, a weak euro and the strenghthening of the dollar against other currencies was one of the main reasons for the drop in the rupee.

The rupee's weakening can also be attributed to low FII inflows and weakening of India's economic fundamentals. The rupee had dropped sharply in early trade on Tuesday as well, but recovered by the end of the day on intervention by the Reserve Bank of India.

Analysts believe that the rupee would continue to weaken given India's poor fundamentals and weak equity markets due to the ongoing problems in Europe, particularly in Greece where there is a possibility of a fresh elections in the country.

The Euro too has dipped against the dollar, dragging other currencies with it.

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