The rupee depreciated 7 paise to 82.59 against the US dollar in early trade on Thursday, ahead of the Reserve Bank of India's monetary policy decision.
At the interbank foreign exchange, the domestic unit opened at 82.59, registering a decline of 7 paise over its last close.
On Wednesday, the rupee settled at 82.52 against the dollar.
Forex traders said the local unit is trading in a narrow range as investors preferred to remain on the sidelines ahead of the release of the RBI monetary policy decision.
RBI is scheduled to announce its bi-monthly monetary policy decision at 1000 hrs. It is largely expected to leave the repo rate unchanged at 6.5 per cent.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.09 per cent to 104.
Brent crude futures, the global oil benchmark, fell 0.26 per cent to USD 76.75 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 44.74 points or 0.07 per cent higher at 63,187.70. The broader NSE Nifty advanced 15.70 points or 0.08 per cent to 18,742.10.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs 1,382.57 crore, according to exchange data.
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