"The adverse situation for rupee is continuing with consistent rise in crude oil prices, hike in interest rate by Federal Reserve, sustained tensions in global trade and the widening current account deficit", Mohit Ralhan, Managing Partner & Chief Investment Officer, TIW Private Equity told NDTV.

Oil prices have reached four-year peaks as the market focused on upcoming US sanctions on Iran while shrugging off the year's largest weekly build in US crude stockpiles. Brent eased 18 cents to $86.11 a barrel on Thursday, while US crude fell 16 cents to $76.25.

The fall in the rupee also led to a sharp rise in government bond yields, due to increasing expectations that the RBI's monetary policy committee (MPC) could go for a bigger rate increase than expected on Friday.

Reserve Bank of India (RBI) in post-market hours on Wednesday said that it will allow state oil marketing firms to raise $10 billion in overseas loans to help them deal with a sharp rise in crude oil prices and a falling rupee currency.

However, government's latest move is likely to have little impact, said forex advisory firm IFA Global in a note. All eyes will now be on the RBI monetary policy scheduled for Friday. Weakness in domestic stocks and bonds is likely to continue. We may see a strong sell off in bonds on account of higher US rates and higher crude prices, it added.

Government also waived a requirement for the companies to hedge dollars while raising funds from the overseas markets.

The central bank has recently said it would pump Rs. 36,000 crore into money markets in October.

The rupee has lost as much as 13 percent to the dollar since the beginning of the year, adding to the nation's oil import bill at a time when crude is hovering at around $85 a barrel.

On Wednesday, the rupee declined sharply lower against the US dollar to close at a record 73.34, amid soaring crude oil prices.