The Indian rupee hit a fresh low at 58.36 against the dollar in early trade on Tuesday. The currency traded at 58.3325 as of 09.05 a.m. against Monday's close of 58.15.
The sharp depreciation in the rupee has made the struggling economy further vulnerable as imports become costlier, inflation risks rise and record high current account deficit worsens.
The Indian rupee has depreciated nearly 8 per cent since May 1, making it the worst performing currency in Asia.
Traders will watch out for any RBI intervention to prevent the rupee from weakening further. The Reserve Bank has followed a hands-off approach towards the rupee, CLSA added.
The Reserve Bank does not have enough dollar reserves and surplus rupee in the system to defend the rupee aggressively, Mr Harding said.