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The rupee depreciated 13 paise to 81.43 against the US dollar in early trade on January 13, 2023 led by a fall in crude oil prices and a muted trend in domestic equities.
Forex traders said sustained foreign fund outflows further weighed on investor sentiment.
At the interbank foreign exchange, the domestic unit opened weak at 81.32 against the dollar, then settled at 81.43, registering a decline of 13 paise over its previous close.
In the previous session on Thursday, the rupee had gained 38 paise to close at 81.30 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.07% to 102.31 as the annual rate of headline inflation in the US retreated in December.
Global oil benchmark Brent crude futures fell 0.36% to $83.73 a barrel.
In the domestic equity market, the 30-share BSE Sensex was trading at 59,678.27, down 279.76 points or 0.47%. The broader NSE Nifty fell 74.05 points, or 0.41%, to 17,784.15.
Foreign institutional investors (FIIs) turned net sellers in the capital market on Thursday as they sold shares worth Rs 1,662.63 crore, according to exchange data.
Meanwhile, on the domestic macroeconomic front, India’s industrial production growth accelerated to a five-month high of 7.1% in November, according to official data released on Thursday.
As per the data, retail inflation eased to a one-year low of 5.72% in December 2022 mainly due to fall in prices of vegetables.
Experts believe that with the Consumer Price Index (CPI) remaining below 6% for the second month in a row, the Reserve Bank has some leeway to hold off on the interest rate hike that has been underway since May last year.