The dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.86 per cent to 95.98.
Volatility continued to grip the markets amid investor concerns over the global coronavirus outbreak. On the domestic equity market front, the 30-share BSE Sensex settled 893.99 points or 2.32 per cent lower at 37,576.62.
Likewise, the broader NSE Nifty tanked 279.55 points or 2.48 per cent to close at 10,989.45.
"Rupee depreciated sharply by more than 2.5 per cent to hit a 17-month low this week as investor sentiments remained fragile amid escalating worries over the impact of rapidly spreading coronavirus globally," Rahul Gupta, Head of Research - Currency, Emkay Global Financial Services, said.
However, the fall was cushioned due to possible intervention of the RBI, he said.
Going forward market participates will have a close eye on any possible intervention/update by the RBI or the government, Gupta said adding that on upside crucial resistance lies at 74.47 (all-time low) and if the rupee consistently trades above 74.47 then 75.0-75.50 is expected.
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