Rupee weakens by another 35 paise to 48.95 against USD

Mumbai, June 23 (PTI) The Indian rupee Tuesday turned
weak by 35 paise at 48.95 against the dollar in morning trade
on heavy capital outflows following bearish trend in the local
stocks amid World Bank's forecast of a slower global economic
growth.

In fairly active trade at the Interbank Foreign
Exchange (forex) market, the domestic currency resumed lower
at 48.85/86 a dollar from its previous close of 48.60/61 a
dollar and later fell to a five-week low of 48.94/95 a dollar
in late morning trade. The rupee had breached the crucial 49
level on May 15, 2009.

Forex dealers said a warning by the World Bank report
that the world is entering into an era of slower growth
impacted the stock market negatively.

Foreign Institutional Investors pulled out more than
USD 353 million since June 15 after their aggressive purchases
in the Indian equity in the current calendar year.

They said stronger dollar against major world currencies
also weighed on the rupee sentiment.

The World Bank has forecast Indian economy to grow by
5.1 per cent this fiscal, the slowest in six years, although
the country has consistently outperformed the multilateral
funder's estimates in the past.

It predicted that the global economy will shrink 2.9 per
cent this year, a bigger fall than the 1.7 per cent
contraction it predicted in March 2009.

The benchmark Sensex was down by 198 points at 1030 hrs.
PTI