Amid retreating equity markets and sustained foreign fund outflows, the rupee in morning trades fell to its weakest level in over two and a half years and dropped 24 paise to touch a low of 68.62 against the dollar.
The steep fall in rupee is the lowest since 28 August, 2013 when it had touched a record low of 68.85 to the dollar.
Besides the domestic hiccups, dollar gaining strength against other major overseas currencies also weighed on the sentiment, said dealers.
On Tuesday, the domestic currency had tumbled 31 paise to close at a fresh 29-month low of 68.38 a dollar on renewed demand for US currency from banks and importers in view of strong foreign capital outflows.
Meanwhile, the benchmark Sensex, after tumbling 271 points in early trades tracking weak global cues, erased some of its losses and was down 90 points at 23, 101.
With inputs from Agencies