The local unit opened low at 81.48 per dollar against the recent close of 81.42. In the morning trade, it was between 81.48 and 81.68.
The rupee fell 26 pips to 81.68 against the US dollar in early trading on Tuesday, driven by rising oil prices and foreign exchange flows.
However, the initial rally in the domestic stock market and the weaker dollar against global currencies limited the rupee’s losses.
On the Interbank Currency Exchange, the rupee was trading at 81.68 per dollar at 09:25.
Forex dealers said currency outflows from capital markets were putting pressure on local departments. They added that firm crude oil prices are also hurting the rupee.
Brent crude, the international oil price benchmark, rose 0.02% to $88.21 per barrel on expectations of a recovery in Chinese demand in the Asian market.
The US Dollar Index, which measures the strength of the dollar against six world currencies, fell 0.17% to 101.96. According to the stock market, 4,444,444 foreign institutional investors (FIIs) sold 219.87 million rupees net in the capital market on Monday.