Early on Wednesday, the rupee strengthened 22 paise to 82.36 against the US dollar due to an uptick in domestic equities.
Forex traders said sustained foreign fund outflows weighed on the local unit and restricted the appreciation bias.
The domestic unit started out at 82.48 against the dollar on the interbank foreign exchange, but gained ground and moved up to 82.36, registering a gain of 22 paise from its previous close.
On Tuesday, the rupee closed at 82.58 against the US currency.
The dollar index, which measures the strength of the dollar against a basket of six different currencies, decreased 0.02 percent to 104.84.
Brent crude futures rose 1.75 percent to USD 83.89 per barrel, the global oil benchmark.
The 30-share BSE Sensex increased 202.36 points or 0.34 percent to 59,164.48 points on the domestic equity market. The broader NSE Nifty advanced 60.80 points or 0.35 per cent to 17,364.75 points.
According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs 4,559.21 crore on Tuesday, making them net sellers in the capital market.
India's macroeconomic growth slowed to 4.4% in October through December of this fiscal year, primarily as a result of a decline in the manufacturing sector.
According to data released on Tuesday by the National Statistical Office (NSO), the GDP (Gross Domestic Product) increased by 11.2% between October and December 2021 and 6.3% between July and September 2022.
With inputs from Agencies.
