At the interbank foreign exchange, the rupee opened at 81.90 against the greenback, then fell to 81.93, registering a fall of 40 paise over its previous closing.
On Tuesday, the rupee consolidated in a narrow range and settled 14 paise higher at 81.53 against the dollar.
The rupee opened weaker on Wednesday as the dollar resumed its upward momentum supported by hawkish Fed talk, said Sriram Iyer, senior research analyst at Reliance Securities.
The local unit could track the weakness of the Asian and emerging market peers, Iyer said, adding that a delay in local bonds’ inclusion for listing on a major global index this year could also cap gains.
“The Reserve Bank of India (RBI) may be present to curb volatility,” Iyer noted.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.40 per cent to 114.55.
Meanwhile, investors are eying the RBI monetary policy meeting decision on Friday.
Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,823.96 crore, as per exchange data.