Rupee drops 37 paise on political deadlock

The rupee dropped 37 paise and was trading at 54.36 to the dollar as sentiments were adversely affected following political uncertainty of the UPA government.

Dollar demand was also felt from oil importers which weighed on the rupee. Crude oil prices have dipped over the last few trading sessions from $116 a barrel to around $108 a barrel on Saudi willing to increase supplies.

This should aid the recovery of the rupee in the next few weeks, due to falling levels of crude. Also, a surge in foreign fund flows into the equity markets following the government's reforms initiatives are also expected to support the rupee.

Meanwhile, equities saw a sharp drop following the withdrawal of support of the Trinamool Congress from the government. The increased level of political uncertainty also weighed on the Indian currency.

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