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The rupee continued its downward spiral as risk-averse investors moved to safe haven currencies such as the US dollar.
Sustained dollar demand from domestic importers, particularly oil companies kept up the pressure on the rupee.
However, towards the end of trade the rupee recovered from the intra-day low on rumours that the Reserve Bank of India may open a direct window for lending dollars to oil companies, as it had done earlier during the 2008 crisis, said forex dealers.
This could ease the demand pressure in the spot market.
However, one group of dealers said that the central bank is unlikely to take this step as the requirements of oil companies are huge and the central bank's reserves might not be sufficient to meet the demand. On Tuesday, the rupee opened at 52.38 and touched a low of 52.76 driven by strong dollar demand. It recovered to touch 52.32 during the day. It closed at 52.43 to the dollar, 27 paise lower than Monday's close of 52.16.
The gains in the euro and the domestic equities also helped the rupee to some extent, said dealers.
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