Stock markets also fell sharply, with the 50-share Nifty benchmark trading below 5,150 levels having dropped around 170 points. The BSE Sensex dropped over 500 points.

The rupee continues to slide despite frantic attempts by the government and central bank to support it and repeated comments by the finance minister that the rupee is oversold. Traders have now set their sight at around 70 levels to be breached soon in the absence of strong steps by the government and the central bank.

Jayesh Mehta of Bank of America Merrill Lynch told NDTV Profit that the fall in the rupee over the last four days has been dramatic.

"There are lots of expectations on the fiscal side that something might happen and markets are waiting for some announcements. It's been pretty nice talk so far, but no implementation," he added.

On Tuesday, Finance Minister P Chidambaram said there is need to "be patient and firm" and the government is doing what is required to be done.

"Rupee will find its appropriate value," he added

The government is considering currency swaps to bolster the reserves, but currency experts said the move is unlikely to help.

"The focus is on how to finance the deficit and not curb it," AV Rajwade told NDTV Profit.

Traders also attributed month-end dollar demand from imports and sustained foreign selling in equities by FIIs for the sharp plune in the rupee.

Today's fall in the rupee comes after the currency posted its biggest percentage fall in 18 years. The rupee has lost 17 per cent against the dollar so far this year - making it the worst performer by far among Asian emerging market currencies.

But even as rupee holds centre stage, other factors -- mainly global - are impacting trade today. Among them are the growing concerns over a military intervention in Syria, which not only hit global markets on Tuesday, but also lifted oil and gold prices.

At times of uncertainty, investors often move out of perceived risky assets such as stocks and into supposedly safe havens such as gold.

Asian markets traded sharply lower, with Japan's Nikkei hitting falling 2.4 per cent to a two-month low.

The Syrian crisis comes even as emerging markets have been reeling for the past few weeks on expectations that the U.S. Federal Reserve will reduce its $85 billion a month bond-buying programme as soon as next month.

(With inputs from agencies)