The rupee today lost 17 paise to close at eight-week low of 45.57/58 against the dollar on continuing strong demand for the American currency from importers, amid a sharp fall in stock markets.
At the Interbank Foreign Exchange (Forex) market, the local unit opened lower at 45.53/55 a dollar from previous close of 45.40/41.
Weakness in local shares right from the onset of business put pressure on the local currency, dealers in foreign exchange said.
The rupee dropped to a low of 45.67 before concluding the day at 45.57/58.
Dollar index, a gauge of six major currencies, was up by 0.18 per cent in late afternoon in London.
The benchmark Sensex of the Bombay Stock Exchange, meanwhile, was down by nearly 615 points in late afternoon trade. It recovered some of the losses but still closed with a loss of 266 points or 1.33 per cent.
Most of the Asian indices too ended in the red.
Meanwhile, global crude oil was trading just above USD 81 a barrel in London today.
The rupee premium for the forward dollar ended sharply weak on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in April dipped to 111-113 paise from 11-1/2-120 paise on Monday.
Far-forward contracts maturing in October also settled remarkably lower at 200-1/2-203 paise from 213-215 paise previously.
The Reserve Bank of India has fixed the reference rate for the dollar at Rs 45.61 and the euro at Rs 61.80.
In cross-currency trade, the domestic currency recovered against the pound sterling and the euro while declined against the Japanese yen.