The Indian rupee declined to its weakest level since mid-March in early trade on Tuesday, as a slump in the euro sharply raised the dollar index, and demand for the greenback from state-run banks added to the pressure.

The rupee depreciated 12 paise to close at 86.82 (provisional) against the US dollar on Tuesday, weighed down by a jump in the US dollar index and a surge in crude oil prices.

The Indian rupee has hit a four-month low, reaching 86.8725 against the US dollar . The fall was largely fueled by a weaker Euro and strong demand for dollars from state-run banks. A weaker rupee could make imported goods more expensive, potentially raising the daily living costs for consumers in the country.