The rupee on Friday lost 10 paise to end the day at 60.17 against the dollar in line with fall in local stocks, amid fresh dollar demand from importers.
Dollar gaining strength in overseas markets also hit the local currency, forex dealers said.
The dollar index was up by 0.03% against its major global rivals.
Foreign fund flows into local stocks restricted the rupee fall to some extent, they added.
Foreign institutional investors (FIIs) picked up shares worth Rs 342.75 crore on Thursday, as per provisional data. The BSE benchmark Sensex, however fell by 86.37 points on Friday.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed sharply lower at 60.34 from previous close of 60.07 in tandem with early weakness in local bourses.
Later, it bounced back to a high of 60.13 before ending at 60.17, a net fall of 10 paise from its previous close.
The benchmark six-month premium payable in September ended at 230.5-232.5 paise against previous close of 232.5-235.5 paise.
Far forward contracts maturing in March, 2015 ended at 472.5-474.5 paise against last close of 480.5-482.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 60.26 and for the euro at 83.73.
The rupee recovered slightly against the pound to 100.62 from 100.79 previously.
However, it declined further to 59.35 per 100 Japanese yen from 59.04 on Thursday and also remained weak to end at 83.49 per euro from 83.32.