The Reserve Bank of India (RBI) is scheduled to announce the outcome of its sixth bi-monthly monetary policy statement for 2019-20 later in the day.
Forex traders said positive opening in domestic equities and foreign fund inflows supported the local unit, but rising crude oil prices and strengthening of the US dollar weighed on the domestic currency.
The rupee opened at 71.22 at the interbank forex market, then lost ground and fell to 71.28, down 3 paise over its last close.
The rupee had settled at 71.25 against the US dollar on Wednesday.
Brent crude futures, the global oil benchmark, rose 1.70 per cent to USD 56.22 per barrel.
Foreign institutional investors remained net buyers in the capital markets, as they purchased shares worth Rs 248.94 crore on Wednesday, as per provisional data.
Domestic bourses opened on a positive note Thursday with benchmark indices Sensex trading 197.37 points up at 41,340.03 and Nifty up 44.50 points at 12,133.65. DRR RVK ANSANS