MUMBAI: The rupee dropped to a two-and-half year low of 51.34 against the US dollar on Friday after the Bombay Stock Exchange Sensex closed 90 points down at 16371 after pulling back from the day's low of 16165. Both the rupee and sensex witnessed their worst weeks in this quarter. The key driver of the markets was risk aversion by foreign institutional investors over fears that the European crisis could worsen . In order to remain liquid should the crisis worsen, international investors have been pulling their money out of emerging markets and investing them in US treasuries . As a result of this all Asian currencies had one of their worst weeks in recent months. "I don't expect any change in sentiment until 2012 as foreign investors typically do not make any fresh investments in December" said a banker . Foreign investors usually have the calendar year as their accounting year and they book profits and take stock of their investments in December . Also most of the fund houses are inactive because of Christmas holidays .

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