The rupee, which opened lower on Monday at 44.90/91 to the dollar and weakened to 45.06, was trading at 44.94/95 at around 2.15 pm.
On Friday, the domestic unit had closed at 44.7350 to the dollar.
“The weakening of the rupee is a reaction to the downgrade in US’ sovereign rating. However, the currency is expected to strengthen on the back of foreign exchange flows chasing higher returns in the Indian markets,” said a dealer with a state-owned bank.
There are two scenarios likely in the emerging global financial turmoil, either foreign funds will sit on cash or they will diversify their investments into Asia, especially India.
