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The rupee fell as much as 0.65 per cent to 60.55, its lowest level since April 29, as escalating tensions in Iraq continue to fuel concerns over inflation while subdued equity markets also weighed.

The Indian rupee declined in early trade on Tuesday. It opened lower by 20 paise at 60.35 per dollar as against Monday's close of 60.15 a dollar. The dollar index lost momentum at 80.7 to end in the red ahead of the FOMC rate decision tomorrow, while the yen ruled at 4 month highs on account a heightened risk aversion in global markets.

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