The rupee weakened by 16 paise to 73.61 against the US dollar in early trade on Tuesday, amid increased demand of the American currencies from importers and sustained foreign fund outflows.
Traders said the US dollar's strength against some currencies overseas and a lower opening in the domestic equity markets also weighed on the local unit.
At the interbank foreign exchange, after opening lower at 73.58, rupee weakened further to quote at 73.61 against the dollar registering a fall of 16 paise over its pervious close.
The rupee ended almost flat at 73.45 against the US dollar Monday.
The dollar's weakness against some currencies overseas and easing crude oil prices, however, restricted the rupee fall, forex traders said.
Globally, Brent crude, the international benchmark, was trading 0.36 per cent down at USD 77.06 per barrel.
On a net basis, foreign investors pulled out Rs 2,230.79 crore from equity markets Monday, as per provisional data.
Meanwhile, the benchmark BSE Sensex plunged 135.93 points, to 33,931.47 in the opening trade.