Mumbai: The rupee depreciated by another 16 paise to 64.18 against the dollar in early session at the interbank foreign exchange today due to concerns over widening fiscal deficit. 

The Centre yesterday introduced a long-term capital gains tax of 10 per cent on stock market gains exceeding Rs 1 lakh, resulting in volatility in forex market. 

Forex dealers said that besides increased demand for the American currency from importers, a lower opening of the domestic equity market also kept the pressure on the rupee. 

Yesterday, the rupee had plunged 44 paise to close at a near two-week low of 64.02 against the US dollar. Meanwhile, the benchmark BSE Sensex slumped by 302.66 points, or 0.84 per cent, at 35,604 in early trade today.