Rupee Skids to 61.74/Dollar amid Global Weakness

The Indian rupee traded off the day's low on suspected dollar selling by foreign banks and state-run banks. The dollar index also weakened 0.2 per cent helping the rupee recover some ground.

Some traders told Reuters they spotted state-run banks selling dollars earlier in the session, which could have been on behalf of the central bank.

Indian stock markets and the rupee have come under selling pressure on the back of geopolitical tensions. The partially convertible rupee traded at 61.45 per dollar as of 1 p.m., recovering from the session's low of 61.74. The Sensex traded 294 points lower, while the Nifty was down 91 points to 7,559. (Read: Sensex, Nifty Fall Sharply As Iraq Concerns Mount)

Global investors sought out safe-haven assets on growing fears that conflicts in Ukraine and the Middle East could sap global growth.

Overnight, US President Obama said in an address that he authorized targeted strikes to protect the besieged Yazidi minority and US personnel in Iraq, after the Iraqi government requested help.

The Reserve Bank reportedly sold dollars to support the rupee yesterday, but movements in other Asian currencies and the global geo-political situation will remain key to the rupee's movement in the near-term, analysts say.

The rupee's performance in the near-term will depend on global factors after foreign funds sold $361.54 million worth equities and $426.59 million worth of debt so far this month.

(With inputs from Reuters)