Mumbai: After plunging to a historic level of Rs49.30 in morning trade, the Indian currency recovered to Rs48.93 against the US dollar at 1250 hrs after RBI announced a further 1% cut in cash reserve ratio.
In wild movement at the Interbank Foreign Exchange (forex) market, the domestic currency was trading lower by 94 paise at 1250 hrs after RBI announced a further one per cent cut in cash reserve ratio to 7.50%.
Rupee fell to historic level on mounting fears of heavy capital outflows after global credit crisis spread to Asia, forex dealers said.
Turmoil in bourses and growing fears about a global recession caused worries that there would be heavy capital outflow from equity, they said.
Indian benchmark Sensex this morning tumbled by 1,089 points before staging about a 50% recovery on the back of institutional support.
The Reserve Bank of India made a surprise move to hike the Cash Reserve Ratio (CRR) by a hefty 100 basis point, taking a total raise of 150 basis points effective from 11 October, releasing Rs60,000 crore into the banking system.