(RTTNews) - Tuesday, the Indian rupee slumped to its lowest level in nearly 3-weeks against the US dollar as a fall in stock prices increased expectations of further foreign fund outflows from local shares. Indian shares fell 3.6 per cent in early trade today. Foreign funds have sold a net $13 billion worth of Indian stocks so far this year after buying a record $17.4 billion in 2007. Other Asian stocks also declined today after Citigroup cut 52,000 jobs in a dramatic move to save itself and downbeat policymaker comments reflected worsening economic conditions that will unlikely improve until well into 2009. U.S. stocks closed lower in a volatile session yesterday as massive job cuts by banks and a weak manufacturing report signaled an accelerating global slowdown. News that Japan, the world's second-largest economy, has joined the Euro zone in recession also weighed on investor sentiment. The rupee dropped to 49.8250 per dollar today, its lowest level since October 29. This may be compared to Monday's New York session close of 49.0750. If the Indian currency weakens further, it may likely target the 50.3 level. The Indian currency is under pressure after reports last week and yesterday showed Hong Kong and Japan sank into recession. India's benchmark stock index fell for a fifth day today as data from the capital markets regulator showed global funds increased sales of local shares. The rupee also declined today as the financial services provider Citigroup lowered India's economic growth to 6.8% for the current fiscal, compared to its earlier estimate of 7.2%, due to a slowdown in consumption and investment. The financial major also lowered its growth projection for the fiscal year 2009-10 to 5.5% from the earlier estimated 6.6%. Sales of local shares have caused the rupee to decline to an all-time low on October 27, heading for its worst annual performance since 1991, when India devalued the currency as a balance-of-payments crisis forced it to pawn gold from its reserves.

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