The rupee depreciated by 12 paise to 68.98 against the US dollar in early trade on Wednesday on increased demand for the US currency from importers and rising crude prices.
However, a higher opening in domestic equities and sustained foreign fund inflows helped in restricting the slide in the Indian unit to some extent, forex traders said.
The local unit opened weak at 68.98 at the interbank forex market, down 12 paise over its last close. The currency, however, pared some initial loss and was trading at 68.92 at 0939 hours.
On Tuesday, the rupee had appreciated by 10 paise to end at 68.86 against the US dollar following a robust response to RBI’s maiden rupee-dollar swap auction.
Under the rupee-dollar swap auction conducted on Tuesday, the Reserve Bank received bids for $16.31 billion, against the notified amount of $5 billion.
Foreign institutional investors (FIIs) pumped in ₹999.02 crore on a net basis on Tuesday, provisional data showed.
Brent crude futures, the global oil benchmark, was trading 0.21% up at $68.11 per barrel.
Meanwhile, the benchmark BSE Sensex was quoting higher by 165.58 points, or 0.43%, at 38,372.85 in opening deals.