Rupee slumps to over two-year low, Sensex falls 200 points

The rupee slumped to an over two-year low on Friday, weighed down on fears of a rate hike in the United States.

The sharp fall in Indian equity markets also weighed on the rupee.

At the time of the filing of this report, the rupee was pegged at 66.99 to the ollar - its lowest since September 2013, when Reserve Bank of India Governor Raghuram Rajan took charge of the central bank amid a crisis-like situation.

The renewed weakness in the rupee has come in the wake of the U.S. Federal Reserve indicating that it might raise rates for the first time in a decade.

Federal Reserve Chair Janet Yellen told a Joint Economic Committee of the U.S. Congress on Thursday that the United States is close to the point at which it might have to raise rates.

The strengthening in the Euro, which the rupee closely tracks, also led to pressure on the Indian currency. Brokerage Edelweiss said the rupee could trade in a range of 66.50 to 67.20 in the near term.

The Sensex fell nearly 250 points while the Nifty slumped below 7,800 level today, tracking a sell off in global markets, a factor that also weighed on the rupee.

The selloff in the global stock markets today has been attributed to the European Central Bank's stimulus package which fell well short of markets' high expectations.

IT stocks have been under pressure in the past few sessions. Most Indian IT companies have 10-30 per cent of their workforce based in Chennai, where floods hit normal business activities.