The rupee depreciated by 54 paise and hit the 71 per dollar mark in early trade Thursday amid strengthening American currency and weak opening in the domestic equity market.
Forex traders said the strength of the US dollar against other overseas currencies and foreign fund outflows weighed on the local unit.
At the Interbank Foreign Exchange, the rupee opened weak at Rs 70.82, then fell further to 71 against the American currency, down 54 paise over it's previous closing price.
On a net basis, foreign portfolio investors (FPIs) sold shares worth Rs 357.82 crore Wednesday, and domestic institutional investors (DIIs) were net sellers to the tune of Rs 791.59 crore, provisional data available with BSE showed.
Meanwhile, the 30-share Sensex was trading 347.53 points, or 0.97 per cent, lower at 35,536.88 at 1000 hrs.
Oil prices extended losses ahead of the meeting of Opec and non-Opec production companies. Brent crude, the international benchmark, was trading 0.83 per cent lower at USD 61.05 per barrel.