After dropping by 30 paise on Thursday, the Indian rupee tumbled further by 21 paise on Friday to close below 55-mark, at 55.06 against the US dollar.

The Indian currency tumbled due to combination of weak local equities and sustained demand for US dollar from importers.

At the Interbank Foreign Exchange (FOREX), the Indian currency started at 55.10 against US dollar, and remained fluctuating in a range of 54.99 and 55.30, before ending trade at 55.06 against per US dollar.

Continued capital inflows limited the rupee's decline to some extent, but strong dollar overseas kept weighing on the Indian currency.

According to figures released by the Securities Exchange Board of India (SEBI), foreign institutional investors (FIIs) infused $107.62 million on Thursday. Importers, primarily oil refiners, demanded more dollars in order to meet their year-end requirements, which resulted into more pressure on the Indian currency.

India FOREX Advisors founder & CEO Mr. Abhishek Goenka said, "The weakness was mainly on account of recovery in the dollar index, Euro falling below $1.3200 levels and uncertainties over US fiscal cliff."

All Asian currencies were also trading on a negative note against the US dollar.