The rupee on Tuesday was 1 paise lower at 82.74 apiece as crude oil prices rose ahead of the RBI's monetary decision on Wednesday.
The domestic currency opened at 82.65 against the US dollar on Tuesday. The rupee closed at 82.73 on Monday, down 90 paise from its previous close. Benchmark Brent crude rose 0.94 percent to $81.75 a barrel.
The dollar index, which measures the greenback against six major currencies, fell 0.11 percent to 103.50 on Monday. Rupee opened marginally higher on positive domestic cues. Expectations of a lower rate hike by the RBI's Monetary Policy Committee also supported the domestic currency.
Last time when rupee was close to 83 dollar index was at 114 but today dollar index is at 104. This change can be described as a balance of payments deficit, said Shankar Sharma, Vice-Chairman and Joint Managing Director – First Global, in response to a Twitter post.
The rupee appears weaker despite a cooling U.S. dollar, confirming predictions that the Indian currency may slow next year as the Chinese economy reopens, making it a more valuable proposition for investors in the Chinese yen.