Rupee hits a record low at 51.81 to a dollar

The rupee traded at historic lows near 52 to a dollar today, extending losses to a sixth day in a row amidst renewed dollar buying by companies and foreign banks.

The rupee was hammered by continued capital outflows amid dollar demand as foreign investors shifted out of Indian market.
 
The domestic unit resumed trading sharply lower at 51.50/55 a dollar against its Friday's close of 51.12/14 a dollar and later tumbled to an all-time trading low of 51.81/82 against the greenback.

The rupee was trading at 51.73/74 in afternoon trade at around 2.00 pm,  off a record low of 51.81. The rupee closed Friday at 51.10/12 against the dollar.

One-month offshore non-deliverable forward contracts were quoting at 52.08/18 a dollar.

Indian stocks were down more than 2.9 per cent as worries about the health of the domestic economy and tumbling foreign markets sapped investor confidence.

Traders said foreign banks were buying dollar here and selling in non-deliverable forwards, taking the benefit of a stronger dollar in overseas markets.

Rupee's downturn started after rating agency Standard and Poor's  downgraded India's sovereign credit outlook. 

Analysts expect the rupee to touch Rs54 per dollar levels in the next two to four weeks as most other Asian currencies fall on global risk aversion.