The Indian rupee dropped further by 43 paise to Rs 45.40 against the American currency in early trade today on persistent dollar demand from banks and importers in view of dollar gains overseas amid weak equity markets.
The rupee resumed lower at 45.38/39 per dollar at the Interbank Foreign Exchange, as against the previous close of 44.97/98 per dollar, and moved down further to 45.40 per dollar before quoting at 45.21/22 per dollar at 1030 hours.
It hovered in a range between Rs 45.18 and Rs 45.40 per dollar during morning deals.
Sustained dollar demand from banks and importers due to dollar firmness in global markets, coupled with persistent capital outflows by foreign funds, mainly affected the rupee value, a forex dealer said.
The dollar rose against the euro in the New York market yesterday on concerns that the Eurozone's sovereign debt problems could turn into a solvency crisis. However, it remained lower against the Japanese yen and Swiss franc following the cut in the USA's credit rating.
Meanwhile, the Indian benchmark Sensex dropped further by 259 points, or 1.52%, to 16,731.25 in early trade today.
