The Indian rupee on Wednesday dropped by another 12 paise to close at 72.55 against the US dollar in line with other Asian peers amid growing concerns over rising coronavirus cases.
Investor sentiment was also hit by massive selloffs in domestic equities and spike in global crude oil prices.
At the interbank forex market, the domestic unit opened weak at 72.51 against the US dollar. During the session, it swung between a high of 72.51 and a low of 72.69.
The rupee finally settled at 72.55, registering a fall of 12 paise over its previous close.
On the domestic equity market front, the 30-share BSE benchmark Sensex crashed 871.13 points to end at 49,180.31, and the broader NSE Nifty dived 265.35 points to 14,549.40.
Foreign institutional investors were net sellers in the capital market on Wednesday as they sold shares worth Rs 1,951.90 crore, as per exchange data.
Global oil benchmark Brent crude advanced 3.08 per cent to USD 62.66 per barrel.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.13 per cent to 92.46.
"In line with other Asian currencies, the Indian rupee fell for the second day in trot as market sentiments tilted towards safe-haven dollar and yen. Several European nations have extended lockdown following a rise in infection cases which raised concerns over global recovery,” Dilip Parmar, Research Analyst, HDFC Securities, said.
"Moreover, US Treasury Secretary Janet Yellen’s statement suggesting a hike in future tax rates and higher inflation also dampened risk appetite,” he added.
