The rupee depreciated by 12 paise to 68.98 against the US dollar in early trade Wednesday on increased demand for the US currency from importers and rising crude prices. However, a higher opening in domestic equities and sustained foreign fun inflows helped in restricting the slide in the Indian unit to some extent, forex traders said.
The local unit opened weak at 68.98 at the interbank forex market, down 12 paise over its last close. The currency, however, pared some initial loss and was trading at 68.92 at 0939 hrs.
On Tuesday, the rupee had appreciated by 10 paise to end at 68.86 against the US dollar following a robust response to RBI's maiden rupee-dollar swap auction.
Under the rupee-dollar swap auction conducted Tuesday, the Reserve Bank received bids for USD 16.31 billion, against the notified amount of USD 5 billion.
Foreign institutional investors (FIIs) pumped in Rs 999.02 crore on a net basis Tuesday, provisional data showed.
Brent crude futures, the global oil benchmark, was trading 0.21 per cent up at USD 68.11 per barrel.
Meanwhile, the benchmark BSE Sensex was quoting higher by 165.58 points, or 0.43 per cent, at 38,372.85 in opening deals.