MUMBAI, Jun 6 (WSJ) : The Indian rupee fell to an 11-month low in early trade Thursday, touching the key psychological level of 57 to a dollar as weak local and regional stock markets took a toll.

Around 0650 GMT, a dollar cost 56.92 rupees, compared with 56.73 rupees in late Asian trade Wednesday.

The rupee had declined to 57 to one dollar in morning trade but was saved from a further fall as exporters began selling the U.S. currency at what was an attractive exchange rate.

The rupee is now within sniffing distance of its all-time low of 57.33 to a dollar, a level it hit on June 22, 2012.

Separately, Reserve Bank of India Deputy Governor K.C. Chakrabarty told reporters in Mumbai that the central bank will take all steps to check volatility in the foreign-exchange market.

The rupee depreciated nearly 5% against the dollar in May alone. The decline was in line with the drop in many Asian and international units as investors anticipated the U.S. Federal Reserve would taper monetary stimulus sooner than expected. They shifted positions to reflect a stronger dollar and a rise in U.S. Treasury rates.

A currency strategist at a Mumbai-based brokerage said once the rupee crosses the threshold of 57, it may fall to as much as 57.25. A breach of this level may see a further small decline in the South Asian currency, but currency dealers expect exporters to take advantage of a higher dollar and sell some of their holdings. Moreover, the Reserve Bank of India is expected to intervene to break the rupee's likely fall, he said.