The Indian rupee sign.
Credit: iStock Photo
Rupee on Friday fell 22 paise to 89.93 against US dollar in early trade.
The rupee pared initial gains and settled for the day lower by 16 paise at 89.79 (provisional) against the US dollar on Wednesday, fuelled by persistent capital withdrawals from foreign investors, alongside heightened greenback demand from bullion importers.
At the interbank foreign exchange, the local unit opened at 89.84 against the dollar but lost ground to trade at 89.94, down 23 paise from its previous close.
On Wednesday, the rupee pared initial gains and settled for the day lower by eight paise at 89.71 against the US dollar.
Forex and equity markets were closed on Thursday for Christmas.
After strengthening to the 89.00 level last week, the rupee has again started to weaken in holiday-thin trade, with FPIs continuing to sell equity and buy dollars after a brief pause, said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.08 per cent lower at 97.89.
Brent crude, the global oil benchmark, was trading 0.16 per cent higher at USD 62.34 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex declined 183.42 points to 85,225.28 in early trade, while the Nifty dipped 46.45 points to 26,095.65.
(with inputs from agencies)