The rupee ended at 96.3150 per dollar on October 1, its weakest level in two months and its sharpest single-day fall in over two months, Reuters reported.

The currency lost 0.5 per cent in a day as global bond yields surged to decadal highs and Brent crude reclaimed the $100-per-barrel mark. The breach of the key 96 level came even as state-run banks sold dollars, likely on behalf of the RBI, to limit the fall.

The 10-year US Treasury yield rose to 5.34 per cent, its highest since 2002, while Brent settled around $102 a barrel. Foreign investors sold Rs 9,484 crore of Indian equities on October 1.

A weaker rupee raises India's import bill, especially for crude, and can stoke inflation. The government has warned that supply disruptions and volatile energy prices pose near-term risks to inflation, the rupee and capital flows. RBI interventions may slow the slide, but the direction will follow oil prices and global bond yields.