Rupee Hit By Dollar's Gains; Europe Debt Crisis Looms.

MUMBAI: The Indian rupee weakened on Tuesday as fears over the extent of impact Europe's debt crisis might have on the global economy boosted the dollar and domestic equities fell.

At 9:32 a.m., the partially convertible rupee was at 49.28/29 per dollar, weaker from Monday's close of 49.15/16.

The euro was at $1.3194, lower than $1.3340 at the end of rupee trade on Monday, while the index of the dollar against six major currencies was at 79.581 points from 78.946 previously.

The dollar was supported near a 9-month high against a basket of currencies on Tuesday with the market gripped by fear that the debt crisis in Europe could unleash substantial damage on the global economy.

Macro-economic fundamentals like an increase in current account deficit and fears the government may find it difficult to stick to its budgeted deficit target for current fiscal may keep underlying view on rupee negative, traders said.

Data from the central bank last Friday showed India's current account deficit widened to $14.1 billion in the June quarter, compared with $12 billion in the same period a year ago. In January-March, the current account deficit had been at $5.4 billion.

The local benchmark share index was down 0.1 per cent.

Source : economictimes.indiatimes.com