Indian rupee plummets

Mumbai: India's rupee fell towards a recent record low on Monday, weighed down by losses in the domestic equity market, but state-run banks capped losses by selling dollars, probably on behalf of the central bank.

The partially convertible rupee closed at 50.30/32 per dollar, 0.4 per cent weaker from Friday's close of 50.09/12. It had hit a record low of 50.60 on November 20.

"Importers were buying dollars in the market, (and) the central bank sold dollars above 50.30," said Agam Gupta, head of forex trading at Standard Chartered Bank.

Four other dealers confirmed state-run banks sold dollars - probably on behalf of the central bank - around 50.30, to prevent a further decline in the currency.

Dealers said heavy losses in the local share market, after an early rally, also hurt sentiment for the rupee.

Indian shares fell 2.8 percent as shaky European markets and deepening economic gloom triggered a wave of foreign fund selling.

Foreign funds have sold a net $13.7 billion worth of Indian shares so far in 2008 after buying a record $17.4 billion last year.