The rupee depreciated by 24 paise to 65.18 against the US dollar on heavy foreign fund outflows.
The domestic unit rupee opened lower at 65.08 per dollar against the previous close of 64.94 per dollar. It dropped further to hit a low of 65.18 per dollar in the afternoon session.
The rupee hovered in a range of 65.18 and 65.00 before quoting at 65.15, down 21 paise at 4.55 pm local time.
A currency trader said increased demand for the US currency from importers and banks and losses in the domestic equity market weighed on the rupee.
However, weakening of dollar against some currencies overseas due to likely delay in the implementation of a major corporate tax cut limited the rupee's losses, traders said.
Yesterday, the rupee had firmed up by a modest two paise to end at 64.94 against the US currency in a quiet trade on mild dollar selling by banks and exporters in the face of subdued overseas sentiment.
Meanwhile, the 30-share BSE index Sensex ended higher by 63.63 points or 0.19 per cent at 33,314.56.