Indian rupee hits lowest in almost two years

Mumbai: India's rupee weakened past 45 per dollar for the first time since November 2006 on Wednesday as stock market losses raised expectations of more foreign fund outflows while strong dollar demand from foreign banks weighed.

The partially convertible rupee ended at 45.12/13 per dollar, 0.62 per cent weaker than Tuesday's close of 44.84/85. It hit a low of 45.20 during the day's trade, its weakest since November 16, 2006. The rupee at the close had lost 2.6 per cent in the last six trading sessions.

"There was heavy dollar buying by some foreign banks today, which weakened the rupee," said Puneet Sharma, chief foreign exchange trader at state-run Allahabad Bank.

"There is a possibility that the central bank may have intervened at 45.05 and 45.15 levels, but the extent of intervention was not much," he added.

The Reserve Bank of India's policy is not to take a view on the exchange rate but only to try and prevent volatility in the market in a flexible and liquid manner, its chief, Duvvuri Subbarao, said on Tuesday.