The central bank before the market opened on Tuesday kept its key policy rates steady, but limited commercial banks' access to its repurchase or standing deposit facility, a move analysts see as an effective rate cut.
The spot currency ended at 130.35/38 per dollar, its lowest close since June 3 and weaker from Monday's close of 130.30/35.
Dealers said the interbank money market rates dropped by 50 basis points after the central bank's move.
The call money rate fell to 6.25 percent from Monday's 6.75 percent and repo rate to 6.00 percent from Monday's 6.50 percent, they said.
Dealers also said the rupee premiums or forward trade will ease due to a possible foreign outflow from government securities after the central bank's decision to limit commercial banks' access to deposit facility.