The Indian rupee on Tuesday depreciated by 18 paise at 49.68 against the US currency on expectations of capital outflows by foreign funds amid heavy dollar demand from importers.
Forex dealers said uncertainty over the outcome of the Lok Sabha elections is influencing trading sentiments here and the domestic bourses are expected to open on a weaker note today, leading to capital outflows by foreign funds.
Besides, increased dollar demand from importers and a strong dollar against other major currencies also put pressure on the local currency.
At the Interbank Foreign Exchange (Forex) market, the domestic unit, which closed at 49.50/52 yesterday, fell by 18 paise to 49.68.
The bellwether Sensex yesterday ended lower by 193.44 points or 1.63 per cent.