The rupee was last trading at 60.12 to the dollar, a drop of a huge 70 paise over Monday's close.

Today's Monetary Policy Review by the RBI laid emphasis on restoring stability to the forex markets, as against the earlier RBI stance which focussed on the inflation-growth dynamics. However, the RBI measures of the last few weeks seemed futile as the rupee continued to lose ground against the dollar.

Dealers say that there was heavy month end demand from oil importers, which ensured that the rupee dropped below 60. They say it's unlikely that the rupee would recover anytime soon.

Meanwhile, stock markets also dropped despite the RBI maintaining its status quo on interest and CRR rates.

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