The rupee fell 2 paise to near all-time low of 84.85 against the US dollar in early trade on Thursday on the back of foreign fund outflows and rising crude oil prices.
An elevated dollar index and muted domestic equity markets weighed on the Indian currency even as investors were awaiting cues from domestic inflation data to be released later in the day, forex traders said.
At the interbank foreign exchange, the rupee opened at 84.85 against the greenback, registering a fall of 2 paise over its previous close.
On Wednesday, the rupee settled with a gain of 2 paise at 84.83 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally lower by 0.12 per cent at 106.26.
Brent crude, the global oil benchmark, rose 0.12 per cent to USD 73.61 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex was trading with a marginal gain of 53.59 points, or 0.07 per cent at 81,579.73 points. The Nifty inched up 2.10 points, or 0.01 per cent, to 24,643.90 points. Both the indices ended Wednesday's session with marginal gains.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 1,012.24 crore, according to exchange data.
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