The rupee settled 7 paise lower at 81.37 (provisional) against the US dollar on Thursday, weighed down by a muted trend in domestic equities and foreign fund outflows.
The rupee started out at 81.45 versus the dollar on the interbank foreign currency market and ended up falling 7 paise to 81.37.
The rupee also reached an intraday high of 81.27 against the dollar throughout the session.
The rupee had a previous session settlement of 81.30 against the dollar on Wednesday.
The dollar index, which measures the value of the dollar against a basket of six different currencies, was down 0.21% at 102.14.
Global oil benchmark Brent crude futures declined 0.94 per cent to USD 84.18 per barrel.
According to exchange data, foreign institutional investors (FIIs) sold shares worth Rs 319.23 crore on Wednesday, making them net sellers in the capital markets.
Due to concerns about the state of the world economy, forex traders anticipate a modest bias against the rupee.
Gita Gopinath, the managing director of the IMF, foresaw a challenging year for the world economy in 2023. According to Gopinath, the world economy is in a unique predicament as a result of historically high inflation, which is producing conflict between monetary and fiscal policies.
With inputs from Agencies.