After hitting the 49-level against the US dollar in opening trade, the Indian rupee recovered 37 paise and was trading at 48.89 at 1200 hrs on Thursday due to heavy dollar demand from foreign banks amid a steep fall in Asian equity markets.
The Indian currency fell to 49.04 against the greenback in opening trade on Thursday.
Foreign Exchange (forex) dealers said foreign banks made hectic dollar purchases in the Non-Delivery Forwards even as bourses witnessed sustained capital outflows affecting dollar supplies in the market.
In active trade, the domestic currency resumed weak at 49.04 a dollar as against 48.52/53 previously and was quoted at 48.89 at 1200 hrs.
Indian benchmark Sensex on Thursday fell by 530.04 points or 4.90 per cent at 1030 hrs on renewed fears of a global recession.