The rupee depreciated 23 paise to 79.68 against the US dollar in opening trade on Thursday, tracking the strength of the American currency in the overseas market and a muted trend in domestic equities.
At the interbank foreign exchange, the rupee opened at 79.60 against the US dollar, then fell to 79.68, registering a decline of 23 paise over the last close.
On Wednesday, the rupee gained 29 paise to settle at 79.45 against the dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.06 per cent to 106.64, as the Federal Open Market Committee (FOMC) meeting minutes showed that though things are slowing in the US, the Fed is not done with the rate hikes.
Meanwhile, global oil benchmark Brent crude futures advanced 0.14 per cent to $93.78 per barrel.
"Higher dollar index is offset by lower oil prices keeping the rupee in a narrow range while 10-year bond yields of India have gained as oil prices fall," said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.
On the domestic equity market front, the 30-share Sensex was trading 229.29 points or 0.38 per cent lower at 60,030.84, while the broader NSE Nifty was down 61.15 points or 0.34 per cent to 17,883.10.
Foreign institutional investors remained net buyers in the capital market on Wednesday as they purchased shares worth ₹2,347.22 crore, as per exchange data.