The Indian rupee dropped to its lowest in nearly a week on Thursday as a sharp fall in the local share market highlighted risk aversion among investors and fuelled concerns of further fund outflows. The partially convertible rupee closed at 49.03/04 per dollar, 0.4 percent weaker than Wednesday's close of 48.85/86.
"The rupee weakened mainly because of the stocks today, but there was strong resistance for the dollar-rupee around 49.20, prompting exporters to sell dollars," a senior dealer with a private bank said. "If the stocks are okay tomorrow, then we could see the rupee rise towards 48.80," he added. One-month offshore non-deliverable forward contracts were at 49.29/39 per dollar, weaker than the onshore spot rate.