The Indian rupee was sold against the dollar on Friday on concerns that turbulence in global markets and heightened risk aversion would trigger a wave of withdrawals by foreign investors. The rupee ended at 40.6350/6450 per dollar, slipping from Thursday's 40.53/54 to its weakest close in over a month.
It hit a nine-year high of 40.20 in late July. "Sure the rupee has fallen today, but the real story is how resilient it's been in the face of so much negative news," said a senior dealer with a foreign bank.
"The fact is that there are plenty of exporters looking to sell dollars, fearing they may miss these levels if the rupee starts moving up again," the dealer added. Foreign fund buying in local shares has been a key driver of the rupee's gains this year, and any reversal of sentiment would likely cause it to weaken.
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