The rupee fell by 37 paise to trade at nearly one-week low of 54.38 against the dollar in early trade today at the Interbank Foreign Exchange on increased demand from oil importers and political crisis after Trinamool Congress withdrew support to the UPA government.
Dealers said apart from strengthening of dollar overseas, political crisis after key ally, Trinamool Congress, decided to withdraw support to the UPA government against the diesel price hike and FDI in retail sector.
A weak opening in the domestic equity market weighed on the rupee sentiment.
Meanwhile, the BSE benchmark Sensex fell by 204.08 points, or 1.10 per cent, to 18,291.93.
The rupee had ended flat at 54.01 against the US currency in the previous volatile session on Tuesday. The Forex market remained closed yesterday for "Ganesh Chaturthi".
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