The Indian rupee dived 46 paise from the previous close to settle at a new all-time low of 72.97 against the US dollar. This marks a 13.50 percent drop in rupee value so far for the year.

The government's measures announced last Friday to support the currency failed to convince the market participants who continue to remain bearish. The RBI's (Reserve Bank of India) intervention did not help either. Investors now await an interest rate hike in the upcoming monetary policy meet to help the rupee.

As for the Indian stock exchanges, losses were extended to the second consecutive day mainly due the fall of the PSU (public sector unit) stocks that reacted to the news of Bank of Baroda, Dena Bank, and Vijaya Bank merger. BSE's Sensex fell by 294.84 points, or 0.78 percent to 37,290.67, while the NSE's Nifty 50 dropped 98.85 points, or 0.87 percent to close at 11,278.90.

Meanwhile, the International Monetary Fund (IMF) on Tuesday said that the rupee has 'effectively' depreciated only 6 to 7 percent this year after adjusting to inflation, which is close to half of the actual drop in its value for the year.