The rupee depreciated 4 paise to 79.96 against the United States dollar in opening trade on Wednesday amid demand for dollar from oil importers and firm crude oil prices.
Forex traders said significant dollar demand from oil importers, firm crude oil prices as well as concerns about swelling trade deficit weighed on investor sentiments.
At the interbank foreign exchange, the rupee opened at 79.91 against the U.S. dollar, then fell to quote at 79.96, registering a decline of 4 paise over the last close.
On Tuesday, the rupee recovered from its all-time low of 80.05 to close 6 paise higher at 79.92 against the U.S. dollar following forex inflows and suspected RBI intervention.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, Asian currencies are all up against the dollar. "Oil companies are still buying USD along with panicked importers," Mr. Bhansali said.
On the domestic equity market front, the 30-share Sensex was trading 637.17 points or 1.16% higher at 55,404.79, while the broader NSE Nifty advanced 188.45 points or 1.15% to 16,529.00.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.13% at 106.54.
Global oil benchmark Brent crude futures fell 0.39% to $106.93 per barrel.
Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth ₹976.40 crore, as per exchange data.
