Rupee posts biggest one-day fall

Mumbai: India's rupee posted its biggest single-day fall in more than 12 years on Wednesday, hit by rising outflows from the local share market and heavy dollar demand from state-run banks to meet commercial operations.

The partially convertible rupee ended at 49.30/32 per dollar, 2.4 per cent weaker than Tuesday's close of 48.1250/1400. On October 27, it fell to a record low of 50.29.

It was the local unit's biggest single-day percentage fall since February 5, 1996, when it dived 2.7 per cent.

"A couple of things in the market that hurt: stocks were negative and no (dollar) supplies coming from New York as well. Besides, even the RBI was not seen selling as was expected," said Paresh Nayar, chief dealer at Development Credit Bank.

Foreign exchange trading volumes were light in New York on Tuesday due to the Veterans' Day holiday.

Some other dealers said the central bank did sell dollars via state-run banks to protect the currency, but added the amount was quite small.

Dealers said the rupee could test 50 per dollar in the next session on Thursday.