Extending its losses for the second day in a row, the rupee on Thursday declined by 37 paise to 62.94 against the dollar in the late morning trade on sustained demand for the US currency from banks and importers.
The rupee resumed lower at 62.85 per dollar as against the last closing level of 62.57 at the Interbank Foreign Exchange (Forex) Market and dropped further to 62.98 before quoting at 62.94 at 1040 hours.
It hovered in a range of 62.79 and 62.98 per dollar during the late morning deals.
Banks and importers preferred to increase their dollar position on the back of firm dollar in overseas market.
In New York market, the US dollar rose against the euro on Wednesday after Federal Reserve minutes suggested more willingness among officials to slow its bond buys, at the same time the European Central Bank is mulling a potential deposit-rate cut into negative territory if more economic stimulus is needed.
Meanwhile, the benchmark Sensex dropped by 245.43 points or 1.19 per cent to 20,389.70 at 1045hrs.