Mumbai: The rupee fell to a six-year low as the nation’s benchmark equity index slid below 10,000 for the first time since June 2006, stoking concerns that capital outflows will quicken.
The currency completed a 10th weekly loss after the Bombay Stock Exchange’s Sensex slumped for a fourth week, taking the benchmark index’s decline this year to a record 51%. The rupee also dropped on concerns that measures taken by global central banks and governments won’t be enough to stave off the credit crisis.
“Measures taken by authorities haven’t been able to restore investor confidence,” said P.V. Rao, a currency trader at IndusInd Bank Ltd in Mumbai. “Indian assets are bearing the brunt and a steeper fall looks inevitable.”
The rupee weakened 0.8% this week to 48.88 a dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. That is the lowest since June 2002. The currency’s 10-week losing streak is the longest since December 2005.
Anoop Agrawal contributed to this story.