Mumbai: The rupee plummeted to a six-year low of 48.75/79 a dollar, down 1.7 per cent from its Tuesday's close of 47.915/93 and to its lowest since July 2002, amidst foreign fund withdrawals and mayhem on the stock market.

The BSE sensitive index dropped more than seven per cent, closing below 11000 points for the first time in over two years, as panic gripped investors after overseas markets tanked.

The rupee opened at 48.25/26 against the previous close of 47.91/92 to a dollar. The local currency fell further as the stock market continued to bleed with foreign investors offloading shares amid mounting fears that the world was moving towards a recession.

Foreign Institutional Investors (FIIs) who poured a record $17.4 billion into Indian stocks last year, have sold stocks worth over $9 billion this year so far this year.

The rupee has also lost almost 20 per cent of its value against the US dollar so far this year against a 12 per cent gain last year.

The rupee's losses can be attributed to a rising demand for the US currency from overseas investors offloading Indian shares as also a widening current account deficit.

The Reserve Bank's efforts to shore up the rupee over the past several weeks, however, have come to naught amidst incessant stock sales by FIIs, triggering an outflow of dollars.