The Indian rupee fell 1 percent on Wednesday following heavy losses in the local stock market and pressured by offshore related dollar demand, with central bank intervention helping it to pull back from the day's low.
The partially convertible rupee ended at 48.525/540 per dollar, weaker than 48.04/06 at close on Tuesday, but off 48.62 when state-run banks sold dollars on behalf of the central bank, traders said. "The rupee fell because of the fall in stocks. There is still risk aversion globally which is hurting," a trader with a primary dealership said.
"The volumes were also low, there is low interest in the market," he said. Dealers said some of the rupee's fall was also due to demand for the US currency from banks looking to arbitrage between the onshore and offshore markets. One-month offshore non-deliverable forward contracts were at 49.20/25, 1.4 percent weaker than the onshore spot rate.