Overseas, the US dollar hovered near a three-week low.
The central bank operationalised these special windows on September 4 to prop the rupee which had fallen close to 30 per cent between April and August.
Forex dealers said strengthening of dollar against other currencies in the global market also put pressure on the rupee but a higher opening of the domestic equity market limited the fall.
The Ministry of External Affairs (MEA) on March 17 had announced that State Bank of India (SBI) would extend a term loan of $1 billion to Sri Lanka, fully guaranteed by the Indian government, and this was part of India's financial aid to the troubled island nation. Ministry of External Affairs (MEA) spokesperson Arindam Bagchi was quoted saying by news agency PTI that the loan would be used for importing food, medicines, and other essential items. "India has always stood with the people of Sri Lanka and we will continue to extend all possible support at this juncture.
Data showed the country's wholesale price-based inflation eased to an eight-month low in January as food prices moderated, offering some relief to policymakers who have long battled to get a handle on surging prices.
The rupee had edged higher by four paise to end at 61.51 against the American currency in yesterday's trade on fresh selling of dollars by banks and exporters.
The rupee had hit an intra-day low of 61.6750 on Friday, its lowest level since Oct. 17.
The main losers on the Sensex were Tata Steel, Hero Moto, BHEL, ONGC & Maruti Suzuki.
India is one of the few countries in the region that enjoys good relations with both Israel and Saudi Arabia, and IMEC would allow it to recreate the old Spice Route to Europe. All this is in jeopardy now, notes Rajeev Srinivasan.
India's sad export figure put pressure on the rupee
The dollar was weak against major world currencies.
Bhaichung Bhutia will have a straight fight with former Mohun Bagan and East Bengal goalkeeper Kalyan Chaubey.
Strong month-end demand for the US currency mainly from oil importers along with currency futures expiry related purchases predominantly weighed heavily on the forex market and haunted investor sentiment.
Bouts of dollar demand from importers put pressure on the rupee
The rupee resumed higher at 67.77 per dollar as against last Friday's closing level of 67.78.
The rupee had hit a record low of 68.85 in August 2013.
A fresh demand for the US currency from importers weighed on rupee.
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Markets ended lower on profit taking ahead of June F&O expiry.
The Indian rupee slumped to a record low near 69 to the dollar on Wednesday on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.
Rupee gained on increased selling of the US currency by banks and exporters
The rupee has lost 37 paise or 0.55 per cent in two days.
BSE Auto was the top sectoral loser with a 4.6% fall followed by realty sector down 3.7% and consumer durables 3.6% post disappointing IIP numbers
Auto stocks Hero MotoCorp and Mahindra & Mahindra gained 1-2 per cent on the back of strong sales in the month of September.
The rupee had depreciated by 13 paise to end at 67.20.
After sinking 586 points during the day, the 30-share index ended 503.62 points, or 1.29 per cent, lower at 38,593.52. The broader NSE Nifty plunged 148 points, or 1.28 per cent, to 11,440.20.
Reserve Bank Governor Raghuram Rajan on Friday said the recent rally in the rupee is comforting but said the currency has not yet achieved stability which will only be reached when he stops keeping a "minute-by-minute" track of the unit.
The rupee had jumped by 164 paise or 2.39 per cent in previous six trading days.
Sharp fall in domestic stock market also affected the rupee sentiment.
The rupee has dropped by 83 paise or 1.24 per cent in three days
The ballooning of crude prices has significantly increased the country's oil import bill and it can also lead to a worsening of the current account deficit and fiscal deficit for the domestic economy.
The rupee closed almost flat at 65.76 against the US dollar on some demand for the American currency from banks.
Strong gains in Vedanta Ltd, Adani Ports, Bharti Airtel and Maruti Suzuki helped the index touch record levels.
The dollar was firm against some global currencies which also weighed on the rupee.
Investors booked profit ahead of the outcome of the two-day US Fed policy meet which begins today.
The Rupee is seen weakening further against the dollar.
The broader market outperformed with the S&P BSE Midcap down 0.3%, while the S&P BSE Smallcap was little changed.
The trading range for the Spot USD/INR pair is expected to be within 66.20 to 67.00.
The domestic currency has gained by four paise or 0.06 per cent in two days.
The Taliban knows that Washington holds the key, points out Ambassador M K Bhadrakumar.
The rupee largely shrugged off the high volatility in stocks and rebounded sharply towards the fag-end trade following bout of dollar selling by exporters
