The rupee on Tuesday lost 21 paise to Rs 54.35 against the US dollar in early trade on the Interbank Foreign Exchange due to appreciation of the American currency against euro overseas.
Increased demand for the dollar from importers also put pressure on the rupee.
Dealers attributed the rupee’s fall to dollar gains against the euro overseas but a higher opening in the domestic stock market capped the fall.
The rupee had closed 18 paise lower at Rs. 54.14 a dollar in Monday’s trade on fresh demand for the US currency.