The rupee declined 9 paise to 74.52 against the US dollar in opening trade on Monday, as muted domestic equities and elevated crude oil prices weighed on investor sentiments.
Forex traders said the Indian rupee is trading in a narrow range ahead of the US Federal Reserve meeting later this week.
At the interbank foreign exchange, the rupee opened weak at 74.43 against the US dollar, then slipped further to 74.52 against the greenback, registering a decline of 5 paise from the last close.
On Friday, the rupee had settled at 74.43 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.08 per cent to 95.72.
"The US Dollar has started flat to marginally higher this early Monday morning in Asian trade, as traders are now eyeing the US Fed's January 25-26 meeting and will watch for pointers on the possibility of a pushback from Chairman Jerome Powell over the pace of interest rate increases, which have already been priced in by global investors," Reliance Securities said in a research note.
The meeting will confirm that the US Fed will soon start withdrawing liquidity and start hiking rates later this year, the note added.
Meanwhile, global oil benchmark Brent crude futures jumped by 0.91 per cent to $88.69 per barrel.
On the domestic equity market front, the 30-share Sensex was trading more than 658.24 points or 1.11 per cent lower at 58,378.94, while the broader NSE Nifty declined by more than 210.10 points or 1.19 per cent to 17,407.05.
Foreign institutional investors remained net sellers in the capital market on Friday, as they offloaded shares worth ₹3,148.58 crore, as per stock exchange data.