With today's fall, the rupee has hit the lowest level since December 14, when it had closed at 71.90 against the dollar.

China's yuan fell to fresh 11-year lows on Thursday amid worries about the deepening Sino-US trade war. Spot yuan ended the domestic session down 0.34 per cent at 7.0875 per dollar, its weakest such close since March 14, 2008.

"Indian rupee fell to its lowest level since December 14, 2018, mirroring a sudden drop in Chinese yuan and a fall in domestic equity. The mood of the market changed after the chief economic advisor said (there is) no need for (fiscal) stimulus," PTI quoted VK Sharma, head PCG & capital markets strategy, HDFC Securities as saying.

The dollar index edged higher today after minutes from the Federal Reserve's July meeting showed most policy makers viewed their interest-rate cut as part of a mid-cycle adjustment, while they remained confident in a sustained US economic expansion, Mr Sharma added.

The dollar index -- which gauges the greenback's strength against a basket of six currencies -- rose 0.02 per cent to 98.31.

Brent crude futures, the global oil benchmark, rose 0.75 per cent to trade at $60.75 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs. 902.99 crore on Thursday, NSE's provisional data showed.

The domestic equity markets slumped to their lowest levels in around six months on the back of a broad-based selling pressure.

The Sensex slumped 587 points to close at 36,473, its lowest closing level since March 5 and the Nifty50 dropped 177 points to settle at 10,741, its lowest level since February 20.