The Indian rupee fell to its lowest level since January 2017, closing below the psychologically important mark of 68 against the US dollar.

The currency remained volatile through the session as markets digested the outcome of the state elections in Karnataka, where the ruling Bharatiya Janata Party won enough seats to become the single largest party but fell short of winning a majority. The political scenario added to the existing concerns like higher oil prices and outflows from the debt markets, pushing the local unit lower.

The rupee fell to an intraday low of 68.14 against the dollar before closing at 68.11 - down 0.86 percent from its previous close of 67.52.