Lack of FII inflows and growing oil prices are also affecting the rupee, he added.
Foreign investors sold shares worth Rs 9.718 billion on a net basis, provisional exchange data showed.
RBI will not be comfortable at these levels. It was seen defending rupee at all levels, said a senior treasury official of a public sector bank, while predicting that the rupee may fall to 70 levels against the dollar soon.
The rupee had opened strong by 41 paise at 68.42 against the US dollar in early trade on Monday, helped by revived sentiments following optimistic macroeconomic outlook.
However, it soon plunged to a low of 69.62 in line with weakening domestic equities and meltdown in global markets.
Suspected RBI intervention helped it recover from heavy losses, but heavy dollar demand pushed the rupee to close at an all-time low level of 69.91, a fall of Rs 1.08, or 1.57 per cent, over the previous close.
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