The rupee depreciated 4 paise to 83.22 against the US dollar in early trade on Thursday, tracking negative cues from domestic equity markets and sustained withdrawal of foreign funds.
Forex traders said lower greenback index weighed in favour of the local currency amid rising concerns over disruption in global trade through the Red Sea route.
At the interbank foreign exchange, the domestic currency opened at 83.19 and lost further ground to touch 83.24 against the greenback. The local unit later traded at 83.22 against the American currency, 4 paise lower from its previous close.
On Wednesday, the domestic currency settled at 83.18 against the dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent lower at 101.98 on Thursday.
Global oil price benchmark Brent crude declined 0.25 per cent to USD 79.50 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 227.88 points or 0.32 per cent lower at 70,278.43. The broader NSE Nifty was down 117.45 points or 0.56 per cent to 21,032.70.
Foreign institutional investors (FIIs) were net sellers in the equity market on Wednesday as they offloaded shares worth Rs 1,322.08 crore, according to exchange data.