The Indian rupee dropped by 13 paise to 54.48 against the American currency in the late morning trade on fresh dollar demand from banks and importers in view of firm dollar overseas.
The rupee resumed lower at 54.44 per dollar as against the last closing level of 54.35 per dollar at the Interbank Foreign Exchange (Forex) Market and hovered in a range of 54.39 per dollar and 54.52 per dollar before quoting at 54.48 per dollar at 1050 hrs.
Fresh bouts of dollar demand from banks and importers mainly attributed to rupee sentiment, though sustained foreign capital inflows restricting its further fall, a dealer said.
In New York market, the dollar remained strong against the basket of currencies after Congress passed a bill to avoid much of the fiscal-cliff tax increases and delayed spending cuts.
Meanwhile, the Indian benchmark Sensex firmed up by 31 points or 0.16 per cent to 19,745.65 at 1100 hrs.