The rupee touched a two-week low on Wednesday weighed by heavy demand for dollars from oil importers, while negative shares raised foreign fund outflow concerns.
At 10:22 a.m. (0452 GMT), the rupee was at 50.56/57 to the dollar, after touching a low of 50.68, a level last seen on March 7, and weaker than Tuesday's close of 50.39/40.
Asian shares eased, as concerns about China's slowing economy dampened the optimism generated by a brightening outlook for the US economy. India's main stock exchange was down more than 0.1 percent in early trades.
"It is mainly demand from oil importers that is pulling the rupee down," said Anil Kumar Bhansali, vice-president at Mecklai Financials.
There is also some dollar buying for defense equipment payments, he said.
Traders said 50.75 is the next immediate support for the rupee, and exporters could sell at that level.
Brent crude edged towards $125 a barrel, rebounding from sharp losses a day earlier, as lower-than-expected US crude stocks and a weaker dollar offset the prospect of top exporter Saudi Arabia ramping up supply.
Oil is India's largest import item and oil importers are the biggest buyers in the local market.
The one-month offshore non-deliverable forward contract was at 51.04. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all around 50.6, on a total volume of $1.1 billion.