The rupee weakened by 16 paise to a fresh six-and-a-half month low of 65.88 against the dollar that gained clout overseas on talk of a US rate hike and prospects of monetary stimulus pullout. The US Fed’s policy decision and commentary led to foreign fund outflows.

According to forex dealers, month-end demand from importers and the dollar’s gains against other currencies overseas dampened the rupee sentiment.

Yesterday, the rupee had plunged 27 paise to end at 65.72.

Meanwhile, the benchmark Sensex fell further by 44.27 points or 0.14 per cent to 31,115.54 in early trade.