Extending its losing run for the sixth straight session, the rupee on Monday plummeted by a staggering 36 paise to hit a fresh 13-month low of 66.48 against the US dollar as rising crude prices and sustained foreign fund outflows led to subdued forex market sentiment.

This is the lowest closing for the home currency since 10 March 2017.

Overall sentiment for the Indian currency deteriorated further following a sudden spike in crude prices coupled with impending Fed rate hike fears.

Moreover, the Indian currency has been under pressure on growing market conviction of higher interest rate cycle after minutes of RBI’s last policy meeting indicated a shift to more hawkish stance in June despite easing inflation.

The rupee rally is pretty much done and dusted at this juncture as the sudden oil spike in recent months is now posing a new dilemma for policy makers and potential risk of rising inflation, a forex dealer commented.

India benefited the most from low oil prices for the better part of the past three years, enjoying a lower import bill and improving its trade balance and current accounts, he added.

Foreign investors and funds pulled out nearly Rs 8,000 crore from the Indian capital markets so far this month due to ‘considerable’ volatility in global markets on account of the ongoing trade negotiations and firming up of bond yields.

Meanwhile, country’s foreign exchange reserves touched a life-time high of $426.082 billion in the week to 13 April, the Reserve Bank of India (RBI) said.

The rupee today resumed lower at 66.20 as compared to 66.12 at the inter-bank foreign exchange (forex) market.

It extended losses in late afternoon trade to hit a fresh intra-day low of 66.49 on intense dollar pressure.

Though, the mid-session crash forced the Reserve Bank of India (RBI) to step in to sell dollars through the public sector banks to rescue free-falling rupee, but the move failed to have much impact.

The local unit finally settled the day at 66.48, showing a sharp loss of 36 paise, or 0.54 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 66.2177 and for the euro at 81.2690.

In the meantime, the US dollar gained more ground across the board in tandem with treasury yields driven by optimism about the US economy and expectations for a faster pace of rate hikes.

On the energy front, oil eased marginally on rising US borrowing costs and the prospect of further output rises after another increase in the weekly rig count, although the overall picture for crude remained bullish.

Brent crude, an international benchmark, was trading modestly lower at $73.80 a barrel in early Asian trade.

The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 90.46.

In the cross currency trade, the rupee firmed up against the pound sterling to end at 92.72 from last Friday’s close of 92.98 and edged higher against the euro to settle at 81.23 as compared to 81.39.

The home unit also recovered against the Japanese yen to close at 61.43 per 100 yens from 61.46 earlier.

Elsewhere, the common currency euro remained under pressure against the greenback in light of ECB meeting scheduled for Thursday.

The British pound also drifted lower to hit fresh one month low against following a streak of weak data.

In forward market today, premium for dollar rebounded due to fresh paying pressure from corporates.

Both the benchmark six-month forward premium payable in August moved up to 96-98 paise from 95-97 paise and the far-forward February 2019 contract firmed to 230-232 paise from 225-227 paise last weekend.