The Indian rupee fell past the 96 mark against the US dollar on Tuesday, touching a two-month low. The currency closed at 96.1450, down nearly 0.2 per cent on the day.

The rupee opened weaker at 96.05 and stayed under pressure through the session. Dealers said the Reserve Bank of India stepped in to defend the 96 level, but strong dollar demand kept the pressure on.

Foreign investors have pulled about 3.7 billion dollars out of Indian stocks in September. Rising crude prices have added to the strain, with Brent crude trading near 107 dollars a barrel.

A strong US dollar has also weighed on the rupee. The 10-year US bond yield touched 5.24 per cent, close to a two-decade high, drawing money away from emerging markets.

Currency traders expect the rupee to stay weak in the near term. The RBI is likely to keep intervening to slow the fall rather than defend any fixed level, dealers said.