Persistent foreign capital outflows also affected the market sentiment.
Hit by global growth concerns, the rupee on Wednesday crashed below the 68-level after 28 months and closed 23 paise down at 67.95 on fresh demand for the American currency from importers amid a massive fall in domestic stock markets.
A forex dealer said that persistent foreign capital outflows also affected the market sentiment.
The domestic unit resumed lower at 67.77 per dollar as against yesterday's closing level of 67.65 at the interbank Foreign Exchange (Forex) market.
Later, it depreciated further to cross 68-level after 28 months at 68.17 per dollar before ending at 67.95, showing a loss of 30 paise or 0.44 per cent.
It had last touched 68.62 a dollar on September 4, 2013.
The domestic unit hovered in a range of 67.77 and 68.17 during the day.
The dollar index was down by 0.15 per cent against a basket of six currencies in the late afternoon trade.
Overseas, the US dollar traded mostly higher against its main rivals in early Asian trade, but retreated against Japanese yen as crude oil prices descended to near 13-year lows, hitting risk asset markets and putting safe-haven currencies back in favour.
The benchmark BSE Sensex ended lower by 417.80 points or 1.71 per cent after heavy sell-off in global market.
