The rupee hit another new all-time low beyond 80 per dollar early on Thursday, tracking a reversal in the dollar and the recent bounce in Asian equities runs out of steam.
Investors remained on edge, driven by looming central bank meetings in Europe and Japan and uncertainty over the supply of Russian gas.
PTI reported that the rupee fell one paise to an all-time low of 80.06 against the US dollar in early trade.
Bloomberg quoted the rupee at 80.0225, after a weaker opening at 80.0100 from the previous close of 79.9888.
The rupee traded in the range of 80.0013 to 80.0638, marking the first time ever the Indian currency has traded above 80 per dollar, according to Bloomberg.
Reuters reported that the Indian rupee weakened at the open on Thursday and was trading just shy of its lifetime low hit earlier this week, tracking losses in most other Asian peers.
The partially convertible rupee was fetching 80.01/02 per dollar, compared with its close of 79.99 on Wednesday and near its record low of 80.0650 touched on Tuesday.
But the real fear now is that the fall from here could be even steeper, as a break of key psychological rate increases bets in favour of a free fall after, as we have witnessed since the rupee weakened beyond the 77 per dollar rate.
Still, traders expect dollar-selling intervention by the central bank to limit losses.
Investors will watch out for the central bank after a source said the RBI was prepared to sell another $100 billion to defend the rupee from rapid falls.
What is hurting the rupee is the demand for dollars from oil importers.
Moreover, rising current account deficit and trade deficit also weighed on investor sentiment.
According to Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, the rupee slipped below the 80 level as oil buying continues to plague the local unit.