The rupee depreciated 18 paise to 75.81 against the US dollar in opening trade on Wednesday amid strengthening American currency overseas and sustained foreign fund outflows.
Forex traders said the weakness in the rupee was largely due to the strengthening US dollar. Moreover, rising coronavirus cases in the country also weighed on the local unit.
The local unit opened weak at 75.77 at the interbank forex market and then fell further to 75.81, down 18 paise over its last close.
It had settled at 75.63 against the US dollar on Tuesday.
Forex traders said market participants were concerned that the sharp rise in coronavirus cases could weigh on the economy.
In India, the death toll due to COVID-19 rose to 1,694 and the number of cases climbed to 49,391 in the country on Wednesday, according to the Health Ministry.
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Meanwhile, the number of cases around the world linked to the disease has crossed over 36.63 lakh and the death toll has topped 2.57 lakh.
After opening on a weak note, domestic bourses pared the losses and were trading on the positive territory with benchmark Sensex quoting 307.01 points higher at 31,760.52 and broader Nifty rising 86.60 points to 9,292.20.
Foreign institutional investors remained net sellers in the capital market, as they sold equity shares worth Rs 1,059.39 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.36 per cent to USD 30.86 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.09 per cent to 99.80.