The Indian rupee dropped for the eighth straight session on Wednesday as suspected central bank intervention and corporate dollar sales did little to prevent the downward pressure on the unit amid a global sell-off of riskier assets. The rupee rebounded as much as 1.7 percent to 51.70 per dollar from the day's low of 52.60 after state-run banks, who often act on behalf of the Reserve Bank of India (RBI), were spotted selling dollars.
However, the rupee reversed the rise to close at 52.36/37 per dollar, 0.1 percent weaker than 52.2950/3050 at close on Tuesday when it had hit a record low of 52.73 during trade. Exposure to short-term portfolio flows, a rising oil import bill and worsening government finances have heightened the risk for the rupee, Asia's worst-performing currency this year. The rupee has lost 14.6 percent of its value in 2011 to be the worst performing currency in Asia with the closest second being the Thai baht, which has lost only 3.5 percent.