Dollar also gained against euro and other currencies in the overseas forex markets amid global economic growth concerns, Moody's downgrade of world's 15 biggest banks and mounting worries over euro-zone debt troubles including the size of a bailout needed to save Spain's banking sector.
Besides, weak India stock markets also put pressure on the rupee, forex dealers said.
Yesterday, the rupee had ended lower by 15 paise at 56.30, after touching a record low of 56.57 against the dollar yesterday.
After opening lower at Rs 56.80, rupee recovered partially to 56.76 before slipping again to surpass all previous records to trade at new low of 56.99 against the dollar, down 69 (rpt) 69 paise over yesterday's close.
Forex dealers said intervention by the RBI and dollar selling by exporters, however, limited the losses.
Meanwhile, the BSE benchmark Sensex was down 81.78 points, or 0.48 per cent to 16,950.78 at 1115 hrs on selling by foreign funds.