The rupee declined further by 10 paise to 61.83 against the US currency in morning trade on sustained demand for the dollar from importers coupled with strengthening greenback overseas.
The rupee resumed lower at 61.79 per dollar as against yesterday's closing level of 61.73 at the Interbank Foreign Exchange market.
Later, it slid sharply to 61.87, before quoting 61.83 per dollar at 1030 hours.
The Indian unit hovered in a range of 61.87 and 61.78 per dollar in late morning deals.
In the New York market, the US dollar held its own in early trade after European Central Bank officials raised the prospects of further stimulus steps and as investors waited to see if Japan's leader would call a snap election after the country unexpectedly slipped into recession.
Meanwhile, the benchmark BSE Sensex was trading higher by 81.24 points, or 0.29 per cent, to 28,259.12 at 1040 hours.
