The domestic currency, which resumed higher at 42.84/86 a dollar from its last close of 42.87/88, fell to 42.89/90 a dollar in late morning deals due to weak equity markets.
Dealers said a further fall in stocks weighed on the rupee sentiment with little activity in exchange market in early trade.
They said high global crude prices also had negative impact on the domestic unit.
The Indian benchmark Sensex was down by about 147 points in early trade while Asian indices fell 1.0 to 5.67 per cent during morning trade.