After reaching a 11-month low on Monday, the Indian rupee on Tuesday further plummeted to a 13-month low of 63.53 against dollar due to heavy demand for the US currency from importers and some banks amid falling oil prices and chaos in stock markets.
Dealers in foreign exchange said the Reserve Bank may have intervened in the markets but it seemed dollars selling through state-ran banks did not pay off.
They also predicted that the rupee is likely to breach the 64-mark as early as tomorrow.
At the Interbank Foreign Exchange (Forex) market, the rupee commenced sluggish at 63.25 a dollar. Sustained capital outflows pulled it further down to a low of 63.59.
It finally ended the day at 63.53, a fall of 59 paise or 0.94 per cent. This is the worst single day loss for the domestic currency in more than four months.
The rupee had tumbled by 65 paise yesterday. "The Reserve Bank was likely there in the market to smoothen the weakness. They came at 63.50 level. I think we are heading towards 64 level, which we may see tomorrow," said a dealer with a state-run bank.
Meanwhile, Commerce Secretary Rajeev Kher said the Government would get uncomfortable if the Indian currency stays for long at this point.
"The exchange price has come down to 63. As the Secretary of the Department of Commerce I feel that the rupee if it goes further down, or stays for too long at this point, it should give me a reason to feel a little concerned," he said.
Weakness in financial markets abroad following continued downslide in global crude oil (Brent) prices below $60 a barrel amid fall in Chinese manufacturing data also put pressure on the local currency.
Persistent capital outflows too weighed on the rupee while steep fall in US dollar overseas could not impact rupee, a forex dealer said. Foreign portfolio investors pulled out $63.48 mln on Monday, as per Sebi data.