The rupee on Wednesday plunged by 43 paise to breach the historic low of 73/$ level as soaring crude oil prices fuelled worries over capital outflows and widening current account deficit.
The domestic currency closed at a record low of 73.34, down by 43 paise.
Rising US interest rates and bond yields have encouraged investors to pull out funds from emerging markets to pocket better returns, analysts said. Stocks also fell by more than 1.5 per cent due to the rupee falling to record low levels. The benchmark BSE Sensex plunged by 550 points or 1.51 per cent while the broader Nifty tanked 150 points or 1.38 per cent.
The RBI on Wednesday relaxed policy on borrowing from overseas to allow state-owned fuel retailers to raise up to $10 billion external debt for working capital needs.