The Indian rupee on Monday plunged to 49-mark, its lowest closing level in eight years, against the American currency on fresh dollar demand from banks amid a surge in stock markets in Asia and Europe.
The earlier low level of the domestic currency was on June 18, 2002 when it closed at 48.99/49.00 a dollar. Forex dealers said the rupee surged against dollar in early trade on expectations of capital inflows. Central bank's surprise cut in repo rate by one per cent also aided the rupee sentiment, they said.
The local unit also drew support from a remarkable surge in stocks across Asian and Europe. The benchmark Sensex on Bombay Stock Exchange rose by over 450 points at mid-session but pared some loses to end the day higher by 248 points or 2.48 per cent. Asian indices also ended up by about 2.0 to 5.0 per cent. However, rupee's surge was short-lived because suddenly during the day banks started buying dollar heavily, suspected to be on behalf of the defence sector.
In volatile trade at the Interbank Foreign Exchange (forex) market, the Indian unit moved in a range of 48.70 and 49.10 during the day after resuming higher at 48.74/77 a dollar from its previous close of 48.88/89 a dollar.
Meanwhile, RBI fixed the reference rate for dollar at Rs 48.83 and for the single European currency at Rs 65.86.
The rupee premiums on forward dollar ended sharply lower due to fresh receivings by exporters.
The benchmark six-month forward dollar premium payable in March ended at 9 - 11 paise, lower from 15 - 17 paise on Friday and the far-forward maturing in September also closed down at 19 - 21 paise from 27 - 29 paise previously.
In cross-currency trades, the rupee weakened against the Pound Sterling and the euro but strengthened against the Japanese yen.
The domestic currency tumbled against the pound sterling to end the day at Rs 85.11/13 per pound from its previous close of Rs 84.54/56 per pound and also moved down against the Single European Currency to Rs 65.70/72 per euro against its last close of Rs 65.52/54 per euro. The Indian rupee improved further against the Japanese yen to Rs 48.16/18 per 100 yen from its Friday's close of Rs 48.36/38 per 100 yen.