Rupee falls after TMC pulls out from government

The rupee fell to its lowest in nearly a week in early trades on Thursday as Trinamool Congress, key ally of the Congress-led government, withdrew support in protest against the diesel price hike and opening up the multi-brand retail sector.

The support withdrawal will put the fate of the government in the hands of regional parties and put a question over future reforms in sectors like pension and insurance.

At 0905 a.m. local time, the rupee was at 54.38/40 to the dollar as against 54.01/02 Tuesday close. It fell to 54.42, its lowest since September 14. The market was closed on Wednesday for a religious holiday.