The Indian rupee on Monday depreciated further by 21 paise to close at 2-month low of 45.22/23 against the Greenback following distinctly weak global stocks amid increased dollar demand from importers.
Firm dollar overseas due to fresh euro debt concerns amid sustained capital outflows too weighed on the rupee.
Fall in euro against the dollar due to resurfacing of the European debt crisis following downgrade ratings of Greek by Fitch and cutting outlook for Italy by Standard & Poor last Friday led the global stock markets to drop sharply today.
Pramit Brahmbhatt, CEO, Alpari Forex India, said, "The Indian rupee lost more than half percent against the dollar, it fell over 2 month low as local equities failed to performed and closed down by almost 2 percent and euro also continued to lose against the greenback. Expect USDINR pair to touch 45.50 in coming days."
"The trading range for the USD/INR will be between 45.00- 45.50 tomorrow," he added.
The Indian benchmark Sensex on Monday tumbled by nearly 333 points or 1.82 per cent while other Asian indices too closed lower between 1.0 per cent and 3.0 per cent.
At the Interbank Foreign Exchange (Forex) market, the local unit opened lower at 45.14/15 a dollar from its last close of 45.01/02 and immediately touched a high of 45.12.
But month-end dollar demand from importers, mainly oil refiners, took the rupee to a low of 45.32, before recovering some ground to settle the day at at 45.22/23, still weak by 0.47 per cent over its previous close.