The rupee touched a historic low of 83.18 against the dollar briefly during intraday trading, before it closed at 82.74 on Wednesday.
However, the rupee's close of 82.74 was lower than Tuesday's close of 82.45 against the dollar.
Earlier in the day, rupee had opened at 82.37 but later fell to a record low of 83.18 against the dollar.
Analysts have attributed rupee's fall to growing inflation concerns across the globe which has strengthened the dollar, more so due to expectations of hike in key rates by major central banks the world over.
With the UK facing a 40-year high inflation, market watchers are speculating that the Bank of England may hike rates to curb rising prices.
Falling rupee has been a concern and Finance Minister Nirmala Sitharaman, when asked about the dip, said last week that she saw it more as a case of dollar strengthening rather than rupee falling.