The rupee declined 38 paise or 0.46% against the dollar on Tuesday, marking its worst single-day percentage fall since February last year after the results of the Lok Sabha elections showed narrower majority for the National Democratic Alliance (NDA).
The local currency closed at 83.53 against the dollar, compared with 83.15 on Monday.
“Rupee depreciated today as domestic markets fell sharply amid uncertainty over the election results outcome. This may have also led to some sell-off by foreign investors,” said Anuj Choudhary, research analyst at Sharekhan by BNP Paribas.