Rupee hits 11-month low of 56.60 against dollar

The rupee hit 56.60 against Thursday's close of 56.38-39 and is trading at its lowest since June 29, 2012. This is the fourth straight session of decline for the Indian currency, which has seen tremendous pressure amid the strengthening of the dollar.

A sharp selloff in equities weighed on the currency, which traded at 56.47 against the dollar at 09.19 a.m. The Sensex and Nifty traded with over 0.6 per cent cut.

Jai Bala of cashthechaos.com told NDTV Profit the rupee is a cause of concern and it's very likely to hit an all-time low in a few weeks.

"In the extreme short term, the dollar looks overbought and a correction to 55.33 can be expected... However, a breach of 57.30 is just a matter of time after which the rupee will go all the way down to 59," he said.

Reserve Bank of India (RBI) governor D Subbarao's comments on inflation still being high and concerns over the current account gap dented rate cut hopes and pressured the currency. The RBI will take into account macro-economic factors and "more importantly" the current account deficit for policy decisions, Mr Subbarao said on Thursday.

Until recently, the market had been certain the central bank would cut rates by another 0.25 per cent at its June 17 review, but his latest comments have muted those hopes.

The market will now focus on the March-quarter growth data, due to be released around 11 am on Friday, for cues on whether the government's reform measures and three quarter point rates cuts by the central bank have given the economy any traction.

The median consensus of 37 economists showed gross domestic product expanded 4.8 per cent year-on-year, better than the 4.5 per cent growth in the previous three months, which was the lowest in fifteen quarters.