Rupee hits 11-month low; ends at 56.50

The rupee downslide continued for the fourth consecutive day as it fell to an 11-month low to close at 56.50 against the dollar on Friday due to heavy month-end dollar demand from importers amid weak government growth data and heavy capital outflows.

India’s gross domestic product (GDP) grew slower at 4.8 per cent in the January-March period, dragging the full year 2012-13 GDP to a decade low of 5 per cent.

The Indian unit resumed weaker against the American currency for the fourth consecutive day at 56.58 per dollar as against Thursday’s close of 56.38 at the Interbank Foreign Exchange market.

The BSE-benchmark Sensex plunged by 455 points (2.25 per cent) to close at 19,760.30 points.

After touching an intra-day low of 56.75 per dollar, the rupee recovered to 56.42 per dollar on mild dollar selling by exporters. However, persistent dollar demand from banks and month-end buying from oil refiners and capital outflows weighed on the rupee, a forex dealer said.

Further market hopes of a rate cut in the June 17 policy review by the Reserve Bank of India were dampened after the RBI Governor commented on Thursday that retail inflation and current account deficit still remained high.

Call rates & G-secs

The interbank call money rates ended higher at seven per cent from its previous close of 6.75 per cent. Intra-day, it moved in the 6.85 to 7.35 per cent range.

The 8.15 per cent government security (G-Sec), which matures in 2022, closed almost flat at Rs 104.58 from previous close of Rs 104.60. Yields remained unchanged from Thursday’s close of 7.44 per cent.

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