The rupee declined marginally to 83.01 against the US dollar in early trade on Tuesday amid a muted trend in domestic equities.
A stronger American currency and elevated crude oil prices also dented sentiments.
At the interbank foreign exchange, the rupee opened at 83.00 against the dollar, and touched an early high of 82.98 and a low of 83.01 in initial trade.
On Monday, the rupee appreciated 7 paise to close at 83.00 against the US dollar.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the rupee is expected to remain range-bound with a narrow range of 82.95 to 83.05.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent higher at 104.23.
Brent crude futures, the global oil benchmark, rose 0.09 per cent to $82.07 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 67.81 points or 0.10 per cent lower at 71,004.68 points. The broader NSE Nifty declined 44.60 points or 0.21 per cent to 21,571.45 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth ₹126.60 crore, according to exchange data.
India's industrial production growth slowed to 3.8 per cent in December 2023, mainly due to a poor performance by the mining and power generation segments.
Meanwhile, retail inflation declined to a three-month low of 5.1 per cent in January, mainly due to subdued prices of vegetables, fruits and other food items.