The Indian rupee - one of the world's worst performing currencies this year - has pulled back from record lows in recent weeks, but analysts say a fresh record low of 70 to the dollar is not off the table.
"I'm hesitant to suggest the worst is over for the rupee," said Mitul Kotecha, head of foreign exchange strategy at Credit Agricole.
"Eventually this near-term consolidation will give way to a resumption of downward pressure," he said, adding that he forecasts the rupee to breach the 70 to the dollar level in the first quarter of next year.
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"In the first quarter [of 2014] there will be uncertainty around the elections in India, tapering will also be likely to have taken effect and then there'll be concerns about capital flows," he added.
The rupee saw a sharp selloff this year after the Federal Reserve first started talk of tapering in late May, sending it spiraling to a record low of 68.8 to the dollar on August 28. In the weeks since, India's domestic currency recovered some of its losses as tapering fears abated and investors anticipated rupee-boosting measures from new Reserve Bank of India governor Raghuram Rajan.
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