The Indian currency hit a fresh record low of 72.91 against the dollar in early morning trade on high crude oil prices and capital outflows on worries over US-China trade war. On Tuesday, foreign institutional investors pulled out Rs 1,454 crore from the Indian stock markets-their highest daily outflow in over three months.
Brent crude, used to price international oils, gained 57 cents to $79.63 a barrel.
The Indian currency opened 11 paise lower at 72.80 per dollar versus previous close of 72.69.
The rupee is the latest currency to be dragged down by fears that an escalating trade war could hurt global growth and severely affect Asian economies.
The spillover from the emerging-market turmoil in the Argentina peso and Turkish lira is largely weighing on Asia currencies.
Besides, a massive portfolio liquidation pressure from foreign investors and some political uncertainty about 2019 general elections have also been acting as a dampener on forex market sentiments, dealers said.
On Tuesday, the Indian currency hit an all-time low of 72.74 to the dollar on strengthening American currency as crude oil prices went past the $78 per barrel mark.
The total fall of the Indian currency in 2018 now stands at 13.81 percent. It has lost over 2 percent month to date against the dollar on rising oil prices and falling emerging market currencies.
Later, the Indian currency recovered some lost ground on suspected dollar sales by the Reserve Bank of India. It was trading at 72.85 in early trade.
Meanwhile, the Sensex and Nifty were trading marginally lower after opening higher in early trade. At 10:01 am, the Sensex was trading 7 points lower at 37,407 level. The Nifty too was trading lower at 11,270 points, down 20 points or 0.17%.