The Indian rupee fell to a two-week low on Tuesday, hit by worries about foreign investors withdrawing funds after the stock market hit a new low for 2008, but suspected central bank intervention checked its losses.
The partially convertible rupee ended at 42.96/97 per dollar, off a low of 42.9825, a level last touched on May 27, but still 0.2 percent lower than Monday's close of 42.87/88. It hit a 13 month low of 43.21 on May 22.
Dealers said importers scurried to buy dollars as the rupee is expected to weaken further this year as record oil prices put pressure on the trade deficit. India imports 70 percent of its oil needs. "There is a fair amount of buying pressure from importers, and without the central bank intervention we may see the rupee going down to 43.20 levels this week," a dealer with a private bank said.