The currency is headed for a monthly decline on concern slowing growth, 16-year high inflation and equity losses will result in capital outflows. A government report tomorrow may show Asia's third-biggest economy expanded at the slowest pace in almost three years in the second quarter. A four-day advance in crude oil prices also spurred speculation refiners will increase dollar purchases to import the commodity.
The rupee weakened to 43.7735 against the dollar at the 5 p.m. close in Mumbai, from 43.7535 yesterday, according to data compiled by Bloomberg.
The economy expanded 8 percent in the three months through June, the slowest since September 2005, according to the median forecast of economists in a Bloomberg survey.
India's average oil import costs increased to $8 billion a month this year, from $5.5 billion in 2007, trade ministry data show, as the price of the commodity surged 67 percent in the past year.
Overseas investors sold $7.3 billion more local shares than they bought this year as the benchmark stock index slumped 31 percent. They were net sellers of local stocks on all but five of the 16 trading days this month.
The rupee rose earlier on speculation the central bank will seek to bolster the currency to curb inflation.
The Reserve Bank of India may have purchased the rupee as its decline this week to 44.15 a dollar, the lowest level since March 2007, threatened to boost import costs.
India's foreign-exchange reserves fell for a fifth week through Aug. 15, the longest stretch of declines since November 2000, indicating the central bank sold dollars to support the rupee.