The Indian rupee depreciated 5 paise to 74.28 against the US dollar in opening trade on Wednesday as firm American currency and rising crude oil prices weighed on investor sentiment.
At the interbank foreign exchange, the rupee opened at 74.23 against the dollar, then fell further to 74.28, registering a fall of 5 paise over its previous close.
On Tuesday, the rupee had settled at 74.23 against the US dollar.
"The obvious risk for the rupee is increasing COVID-19 delta variant cases, which continues to lend support to the greenback and could weigh on sentiments back home," Reliance Securities said in a research note.
Moreover, Asian currencies have started flat to marginally weaker against the greenback this Wednesday morning and could also weigh on the local unit, the note added.
Global oil benchmark Brent crude futures rose 0.41 per cent to USD 75.07 per barrel.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was unchanged at 92.05.
On the domestic equity market front, BSE Sensex was trading 197.42 points or 0.38 per cent higher at 52,747.08, while the broader NSE Nifty advanced 54.50 points or 0.35 per cent to 15,802.95.
Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 116.63 crore, as per exchange data.