New Delhi: The rupee fell to its lowest in more than eight months on Friday morning, tracking weakness in other regional currencies, while concerns over flagging domestic growth also weighed on sentiment.
Foreign portfolio outflows from the equity markets are also hurting the rupee.
By 0352 GMT, the partially convertible rupee was trading at 72.04/05 per dollar, its weakest level since December 14.
Almost all Asian currencies were trading weaker against the dollar.
However, the rupee recovered from early low levels to trade higher by 9 paise at 71.72 against the US currency in late morning trade on Friday.
A recovery in equity markets on the buzz that the government may consider relaxation to FPIs from the super-rich tax helped the local currency cut losses.
The rupee recovered to a high of 71.67 in the late morning session before quoting at 71.72 to the US dollar, showing gains of 9 paise over the last close of 71.81.
The US dollar was trading firm against its global rivals. The US dollar index measuring its strength against global peers was up 0.16%.
International benchmark Brent Crude oil was also trading up by 18 cents at USD 60.10 per barrel in Singapore.
The BSE Sensex was trading down 32.88 points at 36,440.05. The broader NSE Nifty was marginally up by 8.55 points at 10,749.90.
(With inputs from agencies)