Mumbai, Aug 28 (Agencies) : The rupee slumped past the 68 per dollar mark on Wednesday, hitting a record low of 68.82, as concerns weighed heavily in the financial markets on the expected increase in government's subsidy burden following the passage of the food security bill and uncertainty over a possible US led military strike against Syria.

 Continuing its free-fall, the rupee recorded a steep fall of 258 paise on Wednesday, after opening the session at 67.06, sharply below its Tuesday's close of 66.24.

Forex dealers said besides strong month-end demand for the American currency from importers, concerns related to subsidy burden after the passage of Food Security Bill and capital outflows mainly weighed on the domestic currency.

Further, rising crude prices in the global market, following uncertainty of a possible US led military strike against Syria, also put pressure on the rupee.

Global markets were also jittery after reports said that simmering tensions in Syria may affect geopolitical balance.

Equity benchmark Sensex was trading at 17,514.94 points, down 453.14 points and Nifty was trading at the 5,138 level down 200 points from its Tuesday's close at 10:20am.

Gold prices also soared, touching Rs. 34,000/10gm according to TV reports.

Finance minister P Chidambaram said on Tuesday the rupee had overshot its true level and that country was one of several emerging markets that was facing such pressures.

"Every emerging market is challenged today. India is also challenged and the impact is also felt on the equity market as well as on the currency market," he said.

The rupee has lost over 16% since the beginning of the year, while the equity market barometer Sensex has fallen over 8% or more than 1,500 points in the last one month.

Chidambaram further said the fiscal deficit would be contained at 4.8% of the GDP even after doling out subsidies for the implementation of the Food Security Bill.

"(Fiscal deficit of) 4.8% of GDP and the absolute number indicated in the Budget is a red line and the red line will not be breached. We have provided enough money for the cost of the food security programme for the remainder of the current fiscal."

"As the roll out takes place in the states, money will be provided. We think that after providing for the food bill we will still remain in the limit we have set for ourselves in the Budget papers," he said.