The rupee weakened by 40 paise to 61.65 against the US dollar in early trade on Thursday at the Interbank Foreign Exchange market due to increased demand for the US currency from oil importers.

Increased capital inflows and a weaker dollar against other major currencies overseas limited the losses, forex dealers said.

The rupee had lost 21 paise to close at 61.25 against the dollar yesterday on demand from importers for the US currency as local equities declined.

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