The rupee which opened at around Rs 62 levels in early morning trade, fell sharply and was last trading at Rs 62.30, a drop of almost 30 paise from morning levels.
Equity sentiments also turned weak, following a sudden fall in the rupee with the Sensex and the Nifty dipping.
The last few months have seen the rupee remaining remarkably resilient after a host of measures by the government and the RBI helped cool the current account deficit. Read more on CAD and its impact on the rupee here
The rupee had last year in Sept fallen to a record low of 68.81 against the dollar, following hints of withdrawal of quantitative easing by the Federal Reserve.
Despite the Fed now easing by almost $20 billion its asset purchase programme, the rupee has managed to show remarkable resilience.