The Indian rupee Tuesday saw a drop of 16 paise against the US dollar to hit a new all-time low of 71.37 on the back of a strong demand for the US currency.

Opening at a record low of 71.24 against a dollar at the Interbank Foreign Exchange, down from its previous close of 71.21, the local currency weakened further to trade at a life-time low of 71.37 per dollar.

Around 9.55 am, the rupee was trading at 71.19.

Besides strong demand from importers for the US currency, according to forex dealers, capital outflows too contributed to the rupee fall.

READ | Rupee ends at all-time low of 71.21; petrol, diesel hit fresh high

“Indian rupee has made a new low of 71.37 in the spot market (around 9.15 a.m.). Weak domestic equity and bond markets as well as higher crude oil prices and a broad depreciation in the Asian currencies against the dollar pulled the rupee lower,” IANS quoted Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, as saying.

On Monday, the rupee had lost 21 paise, to close at an all-time low of 71.21 against the US dollar.

According to reports, amid tensions over global trade investors bid up their safe haven assets, resulting in strengthening dollar. On the other hand, global crude prices also saw a sharp rally further hitting the overall trading sentiment.

The benchmark Brent crude oil was trading at USD 78.05 per barrel on Tuesday.

Meanwhile, the BSE Sensex fell 7.60 points (0.01%) to 38,304.92 points in early trade.

As per provisional data, foreign institutional investors sold shares worth Rs 21.13 crore on Monday, PTI reported.