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Forex dealers said the dollar's gains against some other currencies overseas too weighed on the rupee sentiment.
The Indian currency started depreciating from Monday ever since an increase in crude oil prices.
After opening lower at 73.91, the rupee had plunged to the day's low of 74.14 as investors turned nervous over reports of rift between the RBI and the government.
At the Interbank Foreign Exchange, the rupee opened up at 73.18 and further advanced to quote 42 paise higher at 73.15 on increased selling of the American currency by exporters and banks.
On Friday, the rupee had settled 29 paise higher at 73.32 against the US dollar, amid a weakening greenback.
At the Interbank Foreign Exchange, the rupee opened lower at 73.62 and slipped further to 73.64 against the dollar, showing a fall of 3 paise.
A falling rupee directly impacts India’s oil import bill and given that the market is deregulated, the final impact is borne by the end consumer.
The rupee has been caught in a free fall for last few sessions and tagged among the worst performing currencies in Asia having weakened by a steep 13.81 per cent since the beginning of the year.
The company, which sells models like City and Amaze, has been holding the price hike hoping the currency would recover from record low against the dollar.
The rupee had crashed to an all-time low of 72.91 in morning trade tracking higher crude oil prices that increased concerns of widening trade deficit at home.
The domestic currency was quoting 22 paise lower at a fresh record low of 72. 91 against the US dollar in morning trade amid surging crude oil prices.
The rupee has fallen by nearly 15 per cent against the dollar this year and touched a new record low of 72.66 on Monday.
Heightened fears that Washington will slap fresh trade tariffs on China also saw investors seek safety in the dollar and pull out of emerging market currencies.
The National Stock Exchange (NSE) too slipped by 79.90 points to 11,509.20.
Rupee, which has plummeted in the past few days, is likely remain at 70-72 this year, say currency experts.