The Hindu Business Line : Rupee falls on fuel price hike

The rupee fell by 16 paise after the government announced the hike in fuel prices. Fears of the impact of the hike on inflation and the country's fiscal deficit also played on minds of market participants.

A forex dealer with a private bank said that inflation is expected to rise by 70-80 basis points, due to the higher price of petrol, diesel and cooking gas. "The hike in oil price will lead to rise in prices across sectors and also impact fiscal deficit," he said.

The rupee opened at 42.59/61 and closed at 42.77, down from the previous close of 42.61/62. In the forward premia market, the six month closed at 2.04 per cent (1.54 per cent) and the one-year at 1.67 per cent (1.36 per cent). - Our Bureau

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