The rupee depreciated 12 paise to 81.64 against the US dollar in early trade on Tuesday, weighed down by significant foreign fund outflows and a muted trend in domestic equities.
At the interbank foreign exchange, the domestic unit opened weak at 81.61 against the dollar, then lost ground and fell to 81.64, registering a decline of 12 paise over its last close.
In the previous session on Monday, the rupee settled at 81.52 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.04 per cent to 102.23.
Brent crude futures, the global oil benchmark, advanced 0.02 per cent to USD 84.92 per barrel.
Forex traders said the rupee is likely to witness range-bound trading as investors brace for interest rate decisions from the Federal Reserve, and the Union Budget for 2023-24, both scheduled to be announced on Wednesday.
In the meantime, Tuesday marks the beginning of Parliament's budget session. President Droupadi Murmu will give his first speech to the joint session of both Houses of Parliament to start the session.
Following the president's speech on Tuesday, the Economic Survey will also be presented.
The 30-share BSE Sensex was down 190.52 points, or 0.32 percent, at 59,309.89 on the domestic equity market. The NSE Nifty, a more general index, dropped by 60.25 points, or 0.34 percent, to 17,588.70.
According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs 6,792.80 crore on Monday, making them net sellers in the capital markets.
With inputs from Agencies.
