Rupee suffers worst sell-off since 1995 India's battered rupee endured its worst day in nearly two decades, plunging nearly 4 per cent to close just below Rs69 to the dollar despite interventions from the nation's central bank, renewing investor concerns over the country's floundering economy. Palaniappan Chidambaram, finance minister, on Tuesday outlined a 10-point scheme to reduce the nation's current account deficit and restore economic growth. The rupee nonetheless quickly fell to a new record low on Wednesday morning, before dropping further late in the day, to close at Rs68.85, a drop of 3.8 per cent, the biggest one-day percentage fall since October 1995, underlining it's position as one of the world's worst performing currencies this year. It is breathtaking. You just have to be in awe at the speed at which the rupee has depreciated. I have tracked the markets for around 23 years, and I've never seen anything like it, falling for 1 or 2 rupees a day, day after day," said Shubhada Rao, chief economist at Yes Bank in Mumbai. The sharp declines come against a backdrop of concerns about rising oil prices given the prospect of possible western military action in Syria, a trend that is likely to hit India's oil imports-dependent economy especially severely, potentially worsening its current account. The early falls forced the Reserve Bank of India to step in to support the currency by selling dollars, analysts said, while Life Insurance Corporation of India, a state-backed investor, also likely intervened to bolster share levels. "The Reserve Bank were in the market this morning again, while it looks as if LIC were also helping to prop up equities too," Ms Rao said. Stocks were hit heavily earlier in the day with the benchmark Bombay Stock Exchange Sensex index falling as much as 2.5 per cent in morning trading, before recovering to close flat on the day. Many fear that an early withdrawal of monetary easing by the US Federal Reserve will now further fuel the flow of yield-seeking funds away from emerging markets. On Wednesday the government confirmed it would establish a panel to examine the possible use of currency swaps with trading partners to bolster foreign exchange reserves. Anand Sharma, commerce minister, also blamed global factors affecting many emerging economies for the rupee's ongoing falls. "Nobody is denying that challenges are not there, but this should not lead us to despondency," he said. There is no need to panic. [The] Indian economy is strong, and we will turn it around. Speaking to parliament on Tuesday, Mr Chidambaram promised to introduce a range of measures to curb the current account deficit, partly by attempting to end a series of legal restrictions limiting iron ore exports and reducing India's dependence on expensive imported coal. His 10-point plan included a pledge to maintain the government's fiscal deficit at no more than 4.8 per cent of gross domestic product this financial year, while also re-emphasising a number of existing government policies designed to encourage exports and manufacturing industries. He also outlined a range of measures that could attract foreign capital to the country, including bonds targeted at investment from India's sizeable diaspora, and refused to rule out the option of India issuing a sovereign bond. But the various measures failed to convince many observers that India's government had taken sufficiently bold action to stem the currency's recent run of falls, or to stave of the threat off a potential future downgrade in the country's sovereign debt. "You can always look at outside influences like Syria or the Fed, but in our case it is the internal ones that dominate," said Surjit Bhalla, chairman of Oxus Investments, a financial advisory company based in New Delhi. Clearly the ineptitude, brazen populism and lack of appropriate policies from the government is the largest part of the problem . . . you really get a feeling that no one is in control, and the markets are responding to that. Investor concerns were exacerbated on Monday when the government passed the country's Food Security Bill, which will provide inexpensive food but whose estimated costs of $21bn have raised concerns about a worsening of the country's fiscal deficit. The Sensex index of leading shares closed up 0.1 per cent at 17,996.