The rupee traded close to the record low it hit last week on Monday on the back of month-end importer dollar demand and weak equities.
The partially convertible rupee traded at 59.77 as of 3.37 p.m. versus Friday's close of 59.27/28. It had last week hit an all-time low of 59.9850.
Sharp selloff in equities markets also pressured the rupee. The Sensex and the 50-share Nifty benchmark closed with over 1 per cent losses.
Foreign banks were seen buying dollars largely on portfolio outflows. Foreign institutional investors have sold cash shares for nine straight sessions, totalling Rs 7,760 crore, as per exchange and regulatory data.
The rupee may find some support if some inflows related to Unilever open offer for India unit materialises today.
Standard Chartered cut its rupee forecast for the end of 2013 to 60.5 per dollar from 53 previously, citing continued global dollar strength, risk of persistent outflows and low probability of strong measures to support the currency.
Meanwhile, Bank of America-Merrill Lynch expects the Reserve Bank to defend 60/dollar for now. It estimates that the RBI can sell up to $30 billion to support the rupee, though adding every dollar sold would further raise concerns about India's foreign exchange reserves.
India's foreign exchange reserves rose to $290.66 billion as of June 14, which analysts say is enough to cover about seven months of imports.
With inputs from Reuters
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