Forex traders said the RBI is keeping a tab on the rupee's fall as Brent crude prices have risen to USD 95 per barrel and dollar index is hovering around 99.70 on a bout of risk aversion on renewed US-Iran tensions.

Moreover, market participants have raised the probability of a September Fed rate hike, pushing US Treasury yields higher and triggering a broad dollar rally.

At the interbank foreign exchange market, the rupee opened at 94.97 against the US dollar, registering a fall of 2 paise from its previous close. On Tuesday, the rupee settled at 94.95 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.75, higher by 0.08 per cent.

The dollar continues to benefit from its safe-haven status, while the surge in Brent and associated inflation concerns have lifted expectations of a September Fed rate hike, providing additional support to the dollar, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Brent crude, the global oil benchmark, was trading higher by 0.99 per cent at USD 95.59 per barrel in futures trade amid concerns over disruptions to crude supplies through the Strait of Hormuz.

Bhansali further noted that RBI is keeping a tab over the fall in rupee level as Brent crude prices have risen to USD 95 per barrel and dollar index to 99.70 on a bout of risk aversion on renewed fighting between the US and Iran heightened fears of prolonged disruptions to crude supplies from the Middle East.

On the domestic equities market front, Sensex tanked 788.52 points to 76,155.76 in early trade, while Nifty slumped 269 points to 23,786.80.

Foreign institutional investors purchased equities worth Rs 1,143.38 crore on a net basis on Tuesday, according to exchange data.