The Indian rupee weakened further on Thursday after the RBI raised its policy rate on Wednesday. Higher crude oil prices added fresh pressure on the currency, which is now close to its all-time low.

The rupee closed at 96.78 to the dollar on Wednesday, down 43 paise. It stood just 18 paise short of its record low of 96.96. Brent crude climbed more than 2 dollars to above 102 dollars a barrel on Thursday.

The RBI raised the repo rate by 25 basis points to 5.5 per cent on Wednesday. It also shifted its policy stance to calibrated tightening. The move was the first rate hike in nearly four years and was passed unanimously by the six-member panel.

Goldman Sachs described the move as a hawkish hike. The bank expects the repo rate to rise by another 25 basis points in December. Currency traders said the 97 mark will be important for near-term flows.

Foreign investors have pulled a record 30 billion dollars from Indian equities this year. Rising oil and hedging costs may keep the rupee weak in the coming days, analysts said.