New Delhi: The Indian rupee was among the worst performing currencies this year, hitting a record low of 68.85 against the dollar due to the weak domestic economy and speculation over scaling back of stimulus, or extra printing of notes, by the U.S.

The rupee lost 27 percent of its value between June and August largely due to a pull-out of money by foreign institutional investors (FIIs) after the US Federal Reserve said it will consider reducing its $85 billion monthly bond-buying programme, introduced after the 2008 global economic crisis to pump prime the economy.

The rupee hit a record low of 68.85 against a dollar Aug 28, just over three months after the U.S. Federal Reserve's May 17 announcement of possible scaling down on the stimulus programme.

"Rupee witnessed an extremely volatile year. U.S. tapering speculation had a big impact; at the same time there are a lot of domestic macro-economic issues," said Anis Chakravarty, senior director at Deloitte India.

Chakravarty told IANS that structural problems of the Indian economy like slow growth, high inflation and widening current account and fiscal deficits made the rupee vulnerable.

FIIs also pulled out $3.7 billion from the Indian equities markets between June and August leading to over 10 percent slide in the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE).

Global funds have sold this year $8.9 billion worth of bonds amid US stimulus tapering speculation. Total foreign holding of rupee-denominated bonds stand at around $25 billion, or 29 percent of the $81 billion ceiling set by the government.

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