Biggest drop for rupee in over a month

Mumbai: The Indian rupee notched up its steepest single day drop in more than a month yesterday, weighed down by falling stocks and dumping of the local unit in offshore currency markets.

The partially convertible rupee ended at 48.01/48.03 per dollar, its lowest level since December 16 and 1.6 per cent weaker than Friday's close of 47.25/26. It was the rupee's largest decline in a session since November 13.

The unit has gained 4.3 per cent so far this month but is still down 18 percent in 2008.

"A combination of factors such as negative stocks, positive offshore dollar/rupee and some corporate (dollar) buying between 47.30-47.50 have pulled the rupee lower," said R.A. Sankaranarayanan, chief of trading at Bank of India in Mumbai.

The main stock index fell 1.7 per cent on the day tracking wobbly world markets, while foreign investors bought the dollar against a basket of Asian currencies as risk aversion climbed, a dealer at a foreign bank said.

The dollar rose against the Japanese yen following a steep interest rate cut by the Bank of Japan on Friday