Rupee on Tuesday fell by 16 paise against dollar in the morning trade on fresh month-end demand for the US currency in the face of high crude oil prices.
At the Interbank Foreign Exchange (forex) market, the domestic currency resumed weak at 42.79/80 a dollar from its previous close of 42.72/73 a dollar and later dropped sharply to 42.88/90 a dollar in late morning deals.
Dealers said oil refiners stepped up dollar purchases for the month-end import payments.
India imports 70 per cent of its oil requirements and rising global crude oil prices resulted in widening trade deficit, they added.
Global oil prices ruled around 133 dollars a barrel at the Asian markets in the early trade today.
The Bombay Stock Exchange benchmark index, Sensex, however, recovered by over 130 points in the early trade following firm Asian equity markets.