Mumbai, May 23 (PTI): The Indian rupee continued its free fall for the sixth day in a row, going below 56 against the US dollar on Wednesday to yet another all-time low on heavy demand for the American currency from importers, especially oil refiners, amid foreign fund outflows and weak equities.
At the Interbank Foreign Exchange or forex market, the rupee recorded its steepest fall ever by dipping below the crucial levels of Rs 55 and Rs 56 per dollar within a span of two days, forex dealers said.
After a lower start at 55.82, the rupee continued its downward journey by losing 74 paise at 56.13 at 1350 hrs.
The dollar has also gained against the Euro and other leading currencies after ratings agency Fitch downgraded Japan's sovereign rating by one notch to A+ with a negative outlook.
Forex dealers said the American currency remained in demand even as the Reserve Bank of India imposed restrictions of forward contracts by banks and arbitrage trading.
They said capital outflow of foreign funds from falling markets remained a major driver behind the rupee's fall as dollar surges because investors are finding the American currency a safer bet amid concerns that Greece might exit the euro-zone.
According to data from the Securities & Exchange Board of India, the stock market regulator, foreign institutional investors sold stocks worth Rs 283 crore on Tuesday.
Meanwhile, the Bombay Stock Exchange benchmark index, the 30-share Sensex, dropped below the 16,000 level after losing over 179 points.