The rupee failed to maintain early gains and was trading lower at 54.83 against the dollar in the pre-noon trade due to uneven demand and supply of the dollar, despite firm dollar overseas.
The rupee opened a tad higher at 54.69 against the dollar tracking the marginally weaker euro and flat domestic markets. On Friday, the Indian unit had closed at 54.76 to the dollar.
Headline inflation data is likely to have hit an 11-month high in October on costlier fuel and food, according to an agency report.
This is likely to cause further depreciation in the rupee as inflation is a major factor in the Reserve Bank of India’s stance on key interest rate cut in its next monetary policy.
Though the RBI expects inflation to start moderating in the January-March quarter and ease to 7.5 per cent in March, it is still way above its perceived comfort level of between 4-5 per cent.
