Rupee down 6 paise Vs USD on growth concerns

Erasing early gains, the rupee today closed six paise lower at 53.22 due to sustained dollar demand after government estimates pegged ongoing fiscal's GDP growth at a decade low of five per cent.

The local unit commenced the day strong at 53.12 against yesterday's closing of 53.16 at the Interbank Foreign Exchange (Forex) market.

It touched a high of 53.07 intra-day but failed to maintain the upward momentum and fell to 53.32 after Central Statistical Organisation (CSO) came out with FY2012-13 growth projections. The rupee later settled for the day at 53.22, down six paise, or 0.11 per cent, against the dollar.

"The rupee surrendered early gains after the government GDP estimates for the current fiscal were out, which pegged India's gross domestic product (GDP) to grow 5 per cent. This is the lowest of all growth projections issued by the government and the RBI," Alpari Financial Services (India) CEO Pramit Brahmbhatt said.

Forex dealers said strong foreign fund flows and weakening of dollar overseas against other currencies capped rupee's fall to some extent.

Despite fall in broader indices, foreign institutional investors continued lapping up Indian equities and pumped in nearly USD 155.5 million (Rs 827.14 crore) today, according to BSE provisional data.

The dollar index, a gauge of six major currencies, was down by 0.24 per cent, while New York crude oil was trading near USD 97 a barrel in European market today.

During Indian Forex market hours, the euro rose to nearly 1.36 against the dollar.

"The rupee was able to appreciate from day's lows taking cues from gradual recovery in the euro," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

The CSO today said it would decline from 6.2 per cent in 2011-12 to 5 per cent, much lower than the projections of the Reserve Bank and other agencies.

... contd.

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