Mumbai: The Indian rupee fell to its weakest level against the dollar since August 2006 on Tuesday, hit by concerns about capital outflows following upheaval on Wall Street and heavy dollar demand from oil firms and foreign banks.
At 11:20 am, the partially convertible rupee was at Rs46.61/63 per dollar, off a low of Rs46.65, its weakest since 3 August, 2006. It had ended at Rs46.05/06 on Monday.
India’s main share index was down around 3%, hurting sentiment on the rupee.
Lower oil prices and the possibility of central bank intervention could provide some support for the rupee which ended down 0.65% at Rs46.05/06 per dollar on Monday, off a low of Rs46.08, its weakest since 20 September, 2006.
Oil, India’s biggest import, was trading below $92 a barrel, as the collapse of Lehman Brothers ignited fears the credit crisis may weaken the global economy and further depress energy demand.