The rupee dropped 12 paise to 61.06 against the American currency on sustained dollar demand from banks and importers amid firm dollar overseas.
The rupee resumed lower at 61.10 per dollar as against the last closing level of 60.94 at the Interbank Foreign Exchange (Forex) Market and declined further to 61.15 per dollar before quoting at 61.06 at 1035 hours.
It hovered in a range of 61.04-61.15 per dollar during the morning deals.
Persistent dollar demand from banks and importers, mainly in oil refinery, affected the value of the rupee against the dollar, a forex dealer said.
In New York, the US dollar rose against the Australian dollar and several other emerging market currencies yesterday as investors continued to react to recent weak data from China, which have amplified concerns that the second-biggest economy is losing steam.