The currency dropped to the lowest in more than two years after mounting credit losses led to the collapse of Lehman Brothers Holdings Inc., the sale of Merrill Lynch & Co. and a debt-rating downgrade of American International Group Inc. The rupee also slumped as India's benchmark share index fell for a sixth day, sliding in tandem with equity markets worldwide.
The rupee fell 1.9 percent to 46.925 per dollar as of the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. It slid as low as 46.975 earlier. JPMorgan forecasts the rupee to drop to 47 by the end of the year.
The rupee was the second-biggest loser among the 10 most- active currencies in Asia outside Japan today. The South Korean won slid 4.4 percent, the most since 1998 as well.