MUMBAI: Demand for dollar to import crude, by oil companies, weakened the Indian rupee to over two-month low on Friday, which closed at 55.55 to a dollar compared to its Thursday close at 55.21. This was the fourth successive week of lower closing for the currency and its longest losing run in the last five months. The weakness of the rupee, however, was contained by suspected dollar selling by the RBI at around 55.50 level, market players said. Despite the current weakness, the rupee is still far away from its record low level of 57.32, hit on June 22 this year.
In the last four weeks, the rupee has lost 3.6% as the euphoria over the reforms announced in early September vanished, the domestic economy showed fresh signs of weakness and also the global markets weakened, mainly because of concerns about the Eurozone. The rupee also weakened on the back of concerns that the UPA-II government may not be able to carry through some of the liberalization measures it had announced earlier in the current session of Parliament.
Market players expect the rupee to get a support at around 56 level as exporters may jump in to sell around those levels.
