The rupee depreciated 4 paise to 83.26 against the U.S. dollar in the morning session on Friday, tracking a strong American currency overseas and sustained foreign fund outflows.
Forex traders said a positive trend in domestic equities supported the local unit at lower levels and restricted the downside.
At the interbank forex exchange, the rupee opened at 83.22 then touched 83.26 against the American currency, registering a decline of 4 paise over its previous close.
On Thursday, the rupee had settled at 83.22 against the U.S. dollar.
Most traders are betting that the U.S. FED is done with rate hikes and therefore we saw some reprieve in the rising dollar index, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Mr. Bhansali further said "the rupee is expected to remain in the same range as RBI continues to sell U.S. dollars and protect the rupee from any depreciation beyond 83.30."
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 106.11.
Brent crude futures, the global oil benchmark, rose 0.15 per cent to $86.98 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 337.75 points or 0.53 per cent higher at 64,418.65. The broader NSE Nifty advanced 106.80 points or 0.56 per cent to 19,240.05.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday as they sold shares worth ₹1,261.19 crore, according to exchange data.