Rupee on Friday depreciated by 42 paise against the greenback in early trade on increased dollar demand from importers and capital outflow by foreign funds on expectations of further fall in the equity markets following the financial bungling by Satyam Computer.
At the Interbank Foreign Exchange (Forex) market, the domestic currency traded lower at 49.22 against the US currency, a fall of 42 paise over the previous close of 48.80/81 a dollar on Wednesday.
The rupee had lost 11 paise at 48.80/81 against US dollar in volatile trade in previous session on Wednesday. The Forex market remained closed on Thursday on account of 'Moharram'.
Dealers said a fall of 749 points in the Bombay Stock Exchange benchmark Sensex on Wednesday on fears that the Satyam Fiasco might affect the equity market led to heavy capital outflow by foreign funds.
They said increased demand for the greenback also put pressure on the rupee.