The rupee closed at 155.05/15 per dollar, compared with Tuesday's close of 154.85/95. It hit a record low of 155.90 on Feb. 14.

"There were sizable conversions but the demand was high today. The oil related demand was there and some profit repatriations were also there," said a dealer.

The local currency has weakened 1 percent so far this year, after declining 2.5 percent last year and 3.9 percent in 2016.

It is expected to be pressured by continued importer demand for dollars, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, dealers added.

The government must repay an estimated 1.97 trillion rupees ($12.68 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.

Foreign investors sold government securities worth a net 3.7 billion rupees in the week ended Feb. 21, central bank data showed.