The rupee depreciated by 12 paise to 82.35 against the US dollar in early trade on Tuesday, amid stronger dollar and foreign fund outflow from the domestic equity market.

At the interbank foreign exchange, the domestic unit opened lower at 82.27 against the dollar and rose to 82.24 before slipping to 82.35.

On Monday, the rupee settled at 82.23 against the US dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies rose 0.26 per cent to 103.86.

Global oil benchmark Brent crude futures fell 1.08 per cent to $79.90 per barrel.

On the domestic equity market front, the 30-share BSE Sensex was trading 36.50 points or 0.06 per cent higher at 58,274.35 points while the broader NSE Nifty was up 38.85 points or 0.23 per cent to 17,193.15 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth ₹1,546.86 crore, according to exchange data.

The collapse of two banks in the US -- Silicon Valley Bank and Signature Bank -- have raised concerns about the health of the financial system even as American regulators are taking steps to control the situation.

Against this backdrop, some analysts also feel that the US Federal Reserve might opt for a slower interest rate hike even as inflation remains high.

On the domestic front, retail inflation fell marginally to 6.44 per cent in February but remained above the Reserve Bank of India's comfort level of 6 per cent for the second month in a row.