MUMBAI: The rupee depreciated 30 paise to 95.84 against the US dollar in early trade on Tuesday on elevated Brent crude oil prices and heightened Middle East tensions.
With Brent crude touching USD 106 per barrel, increased dollar demand from oil importers raised concerns over India's external balance and inflation, forex traders said.
At the interbank foreign exchange market, the rupee opened at 95.84 against the US dollar, registering a loss of 30 paise from its previous close.
On Friday, the rupee had settled at 95.54 against the American currency. Forex and equity markets were closed on Monday on account of Ganesh Chaturthi.
The surge in crude oil prices and heightened tensions in the Middle East have increased safe-haven demand for the dollar and pushed US Treasury yields higher, said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.60 higher by 0.21 per cent.
Brent crude, the global oil benchmark, was trading higher by 1.19 per cent at USD 106.94 per barrel in futures trade, amid escalating US-Iran tensions and fears of disruption to oil flows through the Strait of Hormuz.
The Sensex climbed 233.66 points to 75,022.37 in early trade while Nifty rose 63.85 points to 23,462.30.
Foreign institutional investors (FIIs) offloaded equities worth Rs 930.90 crore on a net basis on Friday, according to exchange data.