The rupee on Monday plunged 110 paise to 64.30 against the US dollar amid heavy month-end dollar demand from importers and capital outflows.
The rupee had, on Friday, gained 135 paise against the dollar.
"Strong dollar demand from companies was enough to engulf supply of dollars from custodian banks. Fitch's warning on sovereign ratings also weighed on rupee," said Anindya Banerjee, currency analyst, Kotak Securities. "In near-term, a range of 63.50 to 65 per dollar is likely.
Demand for dollars usually peaks at the month-end when importers are required to make payments.
The rupee opened lower at 63.65 a dollar from its previous close of 63.20 and dipped further to the day's low of 64.75 but recovered some ground after the Reserve Bank of India was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 1.7%.
The unit moved in a wide range of 63.65 to 64.75 during the day. The rupee fell to a record low of 65.56 last week on Thursday and has lost 15% till date in 2013-14.