MUMBAI, September 14, 2011 (AFP) – India’s rupee slid to a near two-year low against the US dollar on Wednesday on worries about the deepening European debt crisis and as global markets tumble. The partially convertible Indian unit weakened to 48.02 rupees to the dollar on growing demand for the US currency from banks and importers.
The rupee has fallen for eight straight days and shed six percent in the past four weeks.
It last touched the 48 rupee level in late September 2009, according to the Reserve Bank of India (RBI) central bank’s web site.
“People are buying dollars as if there is no tomorrow,” a foreign exchange dealer at a bank in India’s financial hub, Mumbai, who asked not to be identified, told AFP.
Weak local equity markets — which have slid more than 20 percent so far in 2011 — have also put pressure on the rupee as overseas funds sell Indian stocks.
Unlike fellow emerging market giant China, India allows its currency to float freely.
The RBI does not target any particular currency rate or direction and intervenes in the foreign exchange market only to curb excessive volatility.
“I have a feeling that (the) RBI is following a goo