The rupee depreciated by 3 paise to 71.22 against the US dollar in early trade on Thursday amid rising demand for the greenback vis-a-vis other currencies overseas, even as crude oil prices eased.
Besides, foreign fund outflows also weighed on the local unit, forex dealers said.
However, a positive opening in the domestic equity market supported the rupee and restricted the fall, they added.
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At the interbank foreign exchange market, the rupee opened weak at 71.21 and slipped further to hit 71.22 against the US dollar.
The domestic unit had settled at 71.19 against the American currency on Tuesday.
Brent crude futures, the global oil benchmark, declined 1.36 % to $62.35 per barrel.
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The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.02 per cent to 97.54.
Foreign institutional investors sold equities worth ₹ 176.43 crore on a net basis on Wednesday, provisional exchange data showed.
Market benchmark Sensex jumped over 250 points on Thursday tracking gains in select stocks, despite massive selloff in global equities.
The 30-share index was trading 142.73 points or 0.35 % higher at 41,258.11. The broader NSE was also trading 28.80 points, or 0.24 per cent, up at 12,135.70.
The 10-year Indian government bond yield was at 6.63 %.