The rupee tanked to an all time low of 54.16 to the dollar in early trade, taking losses to nearly 20 percent from its July high, as investors bet on further capital outflows from emerging markets.
The pace of decline in the rupee has been gathering steam in recent days with the rupee sinking to record lows for four consecutive days amid an increasingly bearish outlook for both the domestic and global economies.
Weakness in the equity markets contributed to the depreciation of the rupee even as the Reserve Bank of India (RBI) was spotted intermittently selling dollars.
However, RBI was unlikely to intervene aggressively even, analysts said, though the bank´s governor D Subbarao met Finance Minister Pranab Mukherjee and Prime Minister Manmohan Singh to discuss the rupee´s decline.
