The rupee depreciated 27 paise to 78.80 against the US dollar in opening trade on Wednesday, tracking a muted trend in domestic equities.
At the interbank foreign exchange, the rupee opened at 78.70 against the US dollar, then fell to 78.80 against the greenback, registering a decline of 27 paise over the last close.
On Tuesday, the rupee rallied 53 paise -- its best single-day gain in over 11 months -- to close at an over one-month high of 78.53 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.07 per cent to 106.16.
Global oil benchmark Brent crude futures declined 0.42 per cent to $100.12 per barrel.
Experts said foreign portfolio investor (FPI) flows have turned around in domestic equities and Crude oil prices have also been steady. This has reduced pressure on the rupee. However, export data for July weighed on investor sentiment.
Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth Rs 825.18 crore, as per exchange data.
India's exports dipped, though marginally, for the first time in 17 months in July, while the trade deficit tripled to a record $31 billion, fuelled by over a 70 per cent rise in crude oil imports.
The July 2022 exports at $35.24 billion showed a decline of 0.76 per cent on an annual basis. The country's merchandise exports stood at USD 35.51 billion in July 2021.