The rupee was trading at Rs 56.06 to the dollar at 10.00 am IST, dropping 15 paise over Monday's close. The rupee fell dramatically on Monday following the RBI's Monetary Policy in which the nation's central bank kept rates unchanged.
The rupee has been weakening over the last few months, as fundamentals of the economy keep weakening. In May the rupee touched a historic low of 56.40 against the dollar on weakening fundamentals.
India's current account and fiscal deficit continue to be a cause for worry, which is one of the reasons why the rupee has depreciated sharply. A persistent fall in the rupee is likely to make imported items, particularly crude oil costlier.
Forex dealers continue to be believe that the rupee would weaken going ahead, as the global mayhem and the reduced level of portfolio weigh on the currency.