The rupee resumed lower at 66.29 per dollar as against the last closing level of 66.00 per dollar at the Interbank Foreign Exchange (Forex) Market. It dropped further to a low of 68.27 before recovering marginally at 68.14 -- down 214 paise.
It has hovered in a range of 66.25 per dollar and 68.27 per dollar during the session so far.
Analysts said besides strong demand for the American currency from importers on the back of firming dollar overseas on improving economic data, heavy capital outflows and fears of widening fiscal deficit, put pressure on the rupee.
The rupee also reeled under fears that the passage of Food Security Bill in both the houses of Parliament will make the government's food subsidy burden heavier, widening the burgeoning fiscal deficit.
Currency markets were also stress after reports quoting Russian news agencies said the country's missile early warning system had detected launch of two missiles fired towards the Sea's eastern coastline, amid growing fears of Western military action in Syria.
Meanwhile, the BSE benchmark Sensex nosedived by 651.47 points, or 3.45 per cent to close at 18,234.66.