The rupee extended its slide for the second straight session and declined 13 paise to hit a fresh record low of ₹85.87 (provisional) against the US dollar on Wednesday amid higher crude oil prices and stronger American currency.

Lacklustre sentiment in domestic equity markets and sustained outflow of foreign funds also played spoilsport even as investors stayed cautious over lower economic growth projection by the government, forex analysts said.

At the interbank foreign exchange, the rupee opened at ₹85.82 and touched the lowest-ever level of ₹85.89 against the greenback during intra-day. The unit settled at ₹85.87 (provisional) against the dollar, 13 paise lower than its previous close.

• Also read: Weekly Rupee View: Rupee slides further, recovery hinges on the dollar

On Tuesday, the rupee settled with a loss of 6 paise at ₹85.74 against the dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.35 per cent higher at 108.76.

The 10-year US bond yields also remained elevated at 4.67 per cent amid expectations of delayed interest rate cuts by the Federal Reserve.

Brent crude, the global oil benchmark, climbed 0.90 per cent to $77.74 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex skid 50.62 points, or 0.06 per cent, to settle at 78,148.49 points, while the Nifty fell 18.95 points, or 0.08 per cent, to 23,688.95 points.

Foreign institutional investors (FIIs) offloaded ₹1,491.46 crore in the capital markets on a net basis on Tuesday, according to exchange data.

Also read: Economic growth estimated to dip to 6.4% in FY25, lowest in four years

The latest government data released on Tuesday showed India’s economic growth rate is estimated to slip to a four-year low of 6.4 per cent in 2024-25 due to poor show by the manufacturing and services sectors.

The gross domestic product (GDP) growth at 6.4 per cent will be the lowest since the Covid year (2020-21) when the country witnessed a negative growth of 5.8 per cent. It was 8.2 per cent in the last fiscal year ended March 2024.

The first advance estimates of the national income for 2024-25 released by the National Statistics Office (NSO) is lower than the 6.6 per cent projected by the Reserve Bank in December 2024.