Tracking weak stocks, the rupee today again breached the 56-level before closing a whopping 53 paise down at a more than two-week low of 55.93 versus dollar after RBI did not deliver the widely expected interest rate cut and rating agency Fitch downgraded India’s credit outlook.

After opening stronger at 55.33 in sync with global currencies in early trade as Greece poll results eased concerns over a deepening Euro crisis, the rupee strengthened further as it hit the day’s high of 55.28 as forex markets factored in a minimum 0.25 per cent rate cut by RBI.

However, with the central bank choosing to focus on inflation over growth and leaving repo rate untouched at 8 per cent, the domestic currency cracked under pressure, mirroring the local stock market trend. The Sensex, after an initial 160-point rally, erased hefty gains and finally closed 244 points down.

Ratings agency Fitch downgrading India’s credit outlook to negative also soured the sentiment in the forex market. The rupee touched a low of 56.04 before gaining some ground to close at 55.93, a fall of nearly 1 per cent or 53 paise.

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