The dollar hit a 13-year low, falling below the 90-yen level, after the US senate rejected a rescue plan for the beleaguered automakers and the stock markets came crashing.

In fact, the US currency hit a low of 88.43 yen, hours after the senate rejected the auto sector bailout plan.

A fall in the value of the dollar did not, however, help the Indian rupee, which depreciated by 32 paise against the US currency amidst large outflows of foreign funds.

The rupee was trading at 48.65 against the greenback, down 32 paise from the previous close of 48.33/34 a dollar.

The failed auto sector rescue plan send investors flocking to safe havens such as the Japanese currency, prompting Japanese officials to alert to currency traders that the yen was rising too quickly.

The last time the greenback was so low was in August 1995. It later rebounded slightly to stand at 89.04 yen.

Japan's monetary authorities have not intervened since March 2004, allowing the yen to find its own level against the dollar.

Asian stocks collapsed after investors dumped auto stocks, reversing the week's gains on markets.

The rising yen also hit Japanese exporters and commodity producers, who will be forced to surrender recent gains, as the economic outlooks worsens.

Japan's Nikkei 225 average shed 5.6 per cent at 8,235.87 points. Japanese auto stocks. Honda Motor fell 12.5 per cent, Toyota Motor  tumbled 10.1 per cent and Mazda Motor dropped 10.9 per cent.

In Seoul, the Hyundai Motor stock  slid 9.3 per cent.