The rupee declined 15 paise to close at 82.31 (provisional) against the US dollar on Wednesday amid a rise in crude prices and a firm greenback in the overseas market.
However, a strong sentiment in domestic equities and fresh foreign fund inflows restricted a sharp fall of the local currency, according to forex traders.
At the interbank foreign exchange market, the domestic unit opened sharply lower at 82.26 and touched an intra-day high of 82.23 and a low of 82.37 against the greenback.
It finally ended at 82.31 (provisional), registering a fall of 15 paise over its previous close of 82.16.
The dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.02 per cent to 102.13.
On the domestic equity market front, the 30-share BSE Sensex rose 346.37 points or 0.60 per cent to end at 57,960.09 points while the broader NSE Nifty advanced 129 points or 0.76 per cent to 17,080.70 points.
Global oil benchmark Brent crude futures rose 0.94 per cent to $79.39 per barrel.
Foreign Institutional Investors (FIIs) turned net buyers in the capital market on Tuesday as they bought shares worth ₹1,531.13 crore, as per exchange data.