The rupee dropped by 37 paise to close at a fresh record low of 71.58 against the US dollar Tuesday.
The pound sterling also finished higher at Rs 91.77/79 at the close of the Interbank Foreign Exchange (forex) market here today.
Forex dealers said besides strong demand for the American currency from importers, capital outflows too weighed on the domestic currency.
The dollar strengthened against some currencies overseas as investors bid up safe haven assets amid tensions over global trade and strains in emerging market currencies.
A sharp rally in global crude prices further dampened the overall trading sentiment.
Yesterday, the rupee had lost 21 paise, to close at an all-time low of 71.21 against the US dollar.