The Indian rupee slumped to a record low near 50 to a dollar on Thursday as foreign investors dumped stocks to repatriate dollars. The sell-off in the market hit both stocks and the rupee.

The rupee, which hit an intraday low of 49.86 to a dollar, settled at 49.81/82 against the dollar, down 1.1 per cent from Wednesday's close of 49.86.

The Bombay Stock Exchange Sensitive Index ended the day with a loss of 398.20 points, or 3.92 per cent, at 9,771.70 after touching a high of 10,260.55 and a low of 9,681.28.

Government officials, meanwhile, hinted at measures to increase capital inflows amidst market volatility. They expect the rupee volatility to ease as liquidity improves.

Economic affairs secretary Ashok Chawla said the inflation rate would fall to around 9.5 to 10 per cent by the end of 2008

The rupee at its current low is down nearly 21 per cent since the beginning of the year.

The market and investors are now glued to the RBI's monetary policy review due on Friday. The RBI, on its part, has pledged to respond swiftly and pre-emptively to preserve financial and price stability.

"The Reserve Bank is closely monitoring developments in the global as well as domestic financial markets and stands ready to take such pre-emptive action as may be necessary to contain excess volatility in the domestic financial markets," it said.