The rupee slumped to a record low near 69 to the dollar on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.
The pummelling in markets sent the rupee reeling 3.7 percent to an all-time low of 68.85 with the unit closing just a touch off that, at 68.80/81 per dollar, its biggest single-day fall since October 1995.
In absolute terms too, the 256-basis-point fall in the rupee was the biggest ever. An assault on the psychologically key 70 level now appears imminent, as intervention from the central bank seen mid-morning only gave the rupee a brief respite.
In the stock market, state-run Life Insurance Corp allowed the domestic benchmark index to erase steep early losses and end the day stronger.
Foreign investors have sold almost $1 billion of Indian shares in the eight sessions through Tuesday -a worrisome prospect given stocks had been India's one sturdy source of capital inflows in the first half of 2013. If more foreign investors throw in the towel, traders fear it will put the country in a vicious cycle in which the hit to confidence in turn slams shares and the currency even harder.
Policymakers have been consistently struggling to come up with steps that can convince markets they can stabilise the rupee and attract funds into the country.
The pummelling in markets sent the rupee reeling 3.7 percent to an all-time low of 68.85 with the unit closing just a touch off that, at 68.80/81 per dollar, its biggest single-day fall since October 1995.
In absolute terms too, the 256-basis-point fall in the rupee was the biggest ever. An assault on the psychologically key 70 level now appears imminent, as intervention from the central bank seen mid-morning only gave the rupee a brief respite.
In the stock market, state-run Life Insurance Corp allowed the domestic benchmark index to erase steep early losses and end the day stronger.
Foreign investors have sold almost $1 billion of Indian shares in the eight sessions through Tuesday -a worrisome prospect given stocks had been India's one sturdy source of capital inflows in the first half of 2013. If more foreign investors throw in the towel, traders fear it will put the country in a vicious cycle in which the hit to confidence in turn slams shares and the currency even harder.
Policymakers have been consistently struggling to come up with steps that can convince markets they can stabilise the rupee and attract funds into the country.
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