Mumbai, Jan 20 : After a two-session gap, the Indian rupee breached the 49-level again to close at more than one-month low of 49.20/22 against the US currency amid a steep decline in stock markets and dollar gaining strength in the overseas market.
Dealers at the Interbank Foreign Exchange (forex) market said weakness in equity markets, where the benchmark index Sensex shed nearly 230 points, raised fears of further capital outflows which is the key driver behind the domestic unit.
The outflows amounted to USD 658 million in the first fortnight of January. In 2008, the local unit had lost over 17 per cent on sustained capital outflows (FII flight out of the county is put at over 13 billion dollars last year) and weakened to all-time low of over Rs 50 against a dollar. The benchmark Sensex came off its highest level of over 20,000 and lost more than 50 per cent.
The last time the rupee has fallen to this level was on December 8, 2008 when it closed at 49.58/59 a dollar.
The domestic currency today resume lower at 48.94/95 a dollar from its previous close of 48.70/71 a dollar and gradually moved downwards as the anticipated dollar buying did not emerge in the latter part of the day.
Dealers said the rupee recovered from its day's low of 49.25 on late dollar demand from importers. Lack of demand MORE
