The spot rupee hit an all-time low of 158.90 per dollar, surpassing its previous low of 158.80 hit in the previous session.

The currency ended at 158.85/10 per dollar, weaker form Wednesday's close of 158.75/90. The currency declined 3.5 percent so far this year.

"Nobody is selling dollars. Importer dollar demand was there. The rupee is trading weaker due to low liquidity," a currency dealer said.

"Some banks were looking to buy dollars, but there were no sellers. The currency is under pressure and the central bank is also letting a gradual depreciation."

Dealers said the rupee will be under pressure, with exporters staying on the sidelines in anticipation of a fall in the unit, in line with other emerging market currencies.

Dealers expect the rupee to trade between 162-163 level by the end of the year.

However, the central bank had said the pressure on the currency is unwarranted as gross external reserves are at $9.1 billion and the real effective exchange rate indexes indicate that the currency is competitive.

Foreign investors sold government securities worth a net 787.24 million rupees ($4.96 million) in the week ended May 30, bringing the outflow so far this year to 17 billion rupees, central bank data showed.