The dollar also gained strength in the overseas market against the euro and other currencies.
Dealers said the European Central Bank's cutting key interest rate to a record low of 0.75 per cent increased the demand for the dollar from importers, particularly oil companies, weighing on the rupee value.
The rupee had ended 48 paise lower at 54.97 against the American currency yesterday over its previous closing.
Meanwhile, the BSE 30-stock index, Sensex, was down 51.70 points, or 0.29 per cent, to 17,486.97 points in early trade today.
