The rupee dropped to a record low of 62.45 per dollar in late morning trade today on persistent demand for the US currency from banks and importers coupled with capital outflows from foreign funds.
A firm US currency in the overseas market also affected the rupee value against the dollar, a forex dealer said.
The rupee resumed lower at 62.30 per dollar as against the last weekend's level of 61.65 at the Interbank Foreign Exchange (forex) Market and dropped further to a new record low of 62.45.
However, it recovered to 62.21 before quoting at 62.34 per dollar at 1045 hours.
It showed a loss of 69 paise, or 1.12 per cent, from its last close.
The US dollar edged modestly higher in the early trade ahead of key Federal Reserve events this week that may offer more signals about when policy makers will begin tapering monetary stimulus.
Meanwhile the benchmark BSE-30 share Sensex dropped by 209.58 points, or 1.13 per cent, to 18,388.60 at 1050 hours.