Rupee crashes to 68.50, Sensex sinks over 500 points(Update:Rupee)

The Indian rupee breached 68.50 against the U.S. dollar to a record low on Wednesday.

The partially convertible rupee crashed over three per cent to hit a low of 68.55 as against Tuesday's close of 66.24.

Stock markets also fell sharply, with the 50-share Nifty benchmark trading below 5,150 levels having dropped around 170 points. The BSE Sensex dropped over 500 points.

The rupee continues to slide despite frantic attempts by the government and central bank to support it and repeated comments by the finance minister that the rupee is oversold.

Traders have now set their sight at around 70 levels to be breached soon in the absence of strong steps by the government and the central bank.

On Tuesday, Finance Minister P Chidambaram said there is need to "be patient and firm" and the government is doing what is required to be done.

"Rupee will find its appropriate value," he added

The government is considering currency swaps to bolster the reserves, but currency experts said the move is unlikely to help.

Traders also attributed month-end dollar demand from imports and sustained foreign selling in equities by FIIs for the sharp plune in the rupee.

Today's fall in the rupee comes after the currency posted its biggest percentage fall in 18 years. The rupee has lost 17 per cent against the dollar so far this year - making it the worst performer by far among Asian emerging market currencies.

Asian markets traded sharply lower, with Japan's Nikkei hitting falling 2.4 per cent to a two-month low.