However, rise in domestic equities and fall in crude oil prices in the international market capped the rupee’s fall.
The rupee fell by 5 paise to 75.49 against the US dollar in early trade on Wednesday as continued foreign fund outflows kept pressure on the local unit.
However, according to forex traders, rise in domestic equities and fall in crude oil prices in the international market restricted the rupee’s fall.
The Reserve Bank of India kept the benchmark lending rate unchanged at 4% for the ninth time in a row.
At the interbank foreign exchange, the rupee opened stronger at 75.38 but could not stop gains and slipped 5 paise to 75.49 against the US dollar in opening deals.
In the previous session, the rupee had closed at 75.44 against the greenback.
Fitch Ratings on Wednesday slashed India’s economic growth forecast for the current fiscal to 8.4% but raised its growth forecast for the next fiscal to 10.3%.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.22% to 96.16.
On the domestic equity market front, the 30-share Sensex was trading 658.72 points or 1.14 per cent higher at 58,292.37, while the broader NSE Nifty rose 198.15 points or 1.15 per cent to 17,374.85.
Global oil benchmark Brent crude futures fell 0.15% to $75.33 a barrel.
Foreign institutional investors remained net sellers in the capital markets, pulling out Rs 2,584.97 crore on Tuesday, as per provisional data.