The Indian national currency has continued on its path of fall and again weakened by 30 paise to 56.04 against the US dollar during the early trading this morning.

The Indian rupee had opened at 55.85 against the US dollar and fell further on pressure from the market. The currency had fallen 32 paise against the American currency and closed at 55.74 mainly due to concerns of a possible downgrade by rating agency Standard & Poor's.

The international rating agency had downgraded the country's outlook earlier in April. At the time, S&P had said that it is revising outlook for India to `negative' amid macro economic developments and inability of the government to implement reforms at a fast pace.

The agency also said that it might have to downgrade in two years if the situation does not improve in two years and political environment continue to become worse in the country. It says that there is very little progress in economic reforms and GDP growth might fall to the level of 5.3 per cent in 2012-13.

The government expects GDP growth to be in the range of 7 per cent.

A downgrade would increase the cost of borrowing for the Indian businesses. The downgrade will also have an impact on the treasury bonds and rupee movement as they are linked to government finances.