The Indian rupee plunged for the second straight day on Tuesday, dipping by a whopping 163 paise to close at 67.63 against the US dollar, following a steep fall in the local equities amid sustained dollar demand from importers, despite fresh capital inflows.
A firm dollar overseas also kept the rupee under pressure.
Downgradation of India's economic growth by JP Morgan, HSBC Global Research, Nomura, ICRA and Goldman's Sachs as also possible lowering country's credit rating by S&P too weighed on the rupee, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced weak at 66.29 a dollar from last close of 66.00 and immediately touched a high of 66.25.
Later, it fell back sharply in line with fall in local stocks to a low of 68.27 before recovering some ground to settle at 67.63, still down by 163 paise or 2.47 pct.
The benchmark Sensex on Tuesday tanked 651.47 points, or 3.45 per cent, while FIIs bought shares worth Rs 475.92 crore on Monday.
The dollar index was up 0.10 per cent against a basket of six major global units ahead of US manufacturing data due later in the day.
Pramit Brahmbhatt, CEO, Alpari Financial Services, (India) said: "As expected Rupee depreciated today and breached 68.00 levels comfortably taking cues from weak local equities which closed down by almost 3.5 pct after news on possible downgrade of Indias credit rating by S&P and with the raising concern about Syria. In the August month Rupee has depreciated over 14 pct and is expected to trade over 70 levels in coming days. The trading range for the spot USDINR pair is expected to be within 67.30 to 69.00."