The rupee dropped by 73 paise to 61.20 in the late morning deals on persistent month-end dollar demand from importers on the back of strengthening in the US currency overseas.
The rupee resumed lower at 60.91 per dollar as against the last closing level of 60.47 at the Interbank Foreign Exchange (Forex) Market and dropped further to a low of 61.20.
However, it recovered afterwards to 60.83 per dollar before quoting at 61.06 per dollar at 1100hrs.
Sustained dollar demand from importers, mainly oil refiners, affected the rupee value against the dollar, forex dealers said.
In the global market, the US dollar advanced slightly in the early trade as investors prepared for a statement on monetary policy from the U.S. Federal Reserve, as well as the preliminary estimate of second-quarter growth for the world's largest economy.
Meanwhile, the BSE benchmark Sensex dropped by 101.57 points, or 0.52 per cent, to 19,246.77 at 1100hrs.