The rupee on Tuesday gained marginally before settling at a fresh lifetime low of 72.97 against the dollar. It dropped 46 paise against the previous close of 72.51 against the dollar.

The rupee has been the worst-performing Asian currency this year. Its depreciation continued despite the government’s decision last week to relax norms for overseas borrowing and impose restrictions on non-essential imports.

In the morning trade, the rupee recovered 10 paise to 72.41 after opening at 72.55.

On Monday, Finance Minister Arun Jaitley told reporters that the rupee was depreciating because of a squeeze on oil production and the trade war between United States and China, IANS reported. “These are impacts of a very significant ongoing global phenomena,” the minister told reporters in New Delhi. “You have at least three, if not more, indications of the nature of things which are happening globally.”

These two factors along with the internal economic decisions of the United States had strengthened the dollar, he added.

While the rupee’s value has fallen about 12% this year, the International Monetary Fund said the real effective depreciation of Indian rupees is between 6% and 7%, PTI reported. The international organisation’s spokesperson Gerry Rice said the depreciation of the currencies of many of India’s trading partners, including those in the emerging markets, have to be taken into account.

The depreciation will raise the prices of imported goods such as oil and petroleum products, and may impose an upward pressure on inflation, Rice added.

Meanwhile, the domestic benchmark indices maintained losses after fluctuating during opening trade on Tuesday. The BSE Sensex closed 294.84 points down at 37,290.67, while the Nifty 50 ended 98.85 points lower at 11,278.90.

The Nifty PSU Bank Index fell over 5% after shares of Bank of Baroda plummeted over 17% after the government announced its plans to merge the bank with Dena Bank and Vijaya Bank. HUL and Yes Bank were the top gainers on the two indices while SBI and Tata Motors declined the most.