Lower equities weigh on rupee; back at 56

The partially convertible Indian rupee fell further and breached 56 per dollar on the Interbank Exchange today, as weakening equity markets saw a fresh demand for the dollar.

The currency hit a one week low and was seen trading at 56.04 to the dollar at 12.20 pm IST, a sharp drop of 64 paise over Friday's close.

Dealers believe that the rupee may continue to show a gradual decline as the dollar has been strengthening against local currencies.

The Reserve Bank of India is unlikely to intervene, unless there is an increased level of volatility in the markets.

Meanwhile, equity markets were trading lower as global cues weakened following weak jobs data from the US. The BSE benchmark Sensex was down by 163 points at 17347 points and NSE was lower by 58 points at 5,262. This also had an effect on the Indian rupee.

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