The rupee continued to trade in tandem with local stocks and breached the crucial 49-level in early trade on Friday as weak equity markets raised fears of capital outflows amid stronger dollar overseas.

The domestic currency crossed the 49 level for the first time in a month largely due to fears of a slowdown in capital inflows into the country after India's fourth largest software exporter Satyam Computer confessed to its accounts manipulations, leading to a bearish trend in equity markets.