At the interbank foreign exchange, the domestic unit opened at 85.69 against the greenback. In initial trade, it witnessed a low of 85.70, registering a fall of 8 paise over its previous close.

"Brent crude prices have started inching back up -- hovering near USD 68.5 per barrel. For a net oil importer like India, this poses a short-term threat to the trade balance as rising crude typically means higher import bills and a heavier current account, putting additional pressure on rupee," CR Forex Advisors MD - Amit Pabari said.

Meanwhile, in the domestic equity market, the Sensex advanced 168.93 points or 0.20 per cent to 83,578.62, while Nifty rose 52.75 points or 0.21 per cent to 25,506.00.

Foreign institutional investors (FIIs) offloaded equities worth Rs 1,561.62 crore on a net basis on Wednesday, according to exchange data.

"FIIs have remained net sellers in Indian markets, pulling out over USD 6 billion year-to-date. This ongoing outflow has acted as a key drag on rupee strength, offsetting the supportive global dollar weakness," Pabari added.

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