The rupee on Friday lost 29 paise to 54.75 against the dollar in early trade on the Interbank Foreign Exchange (forex) market, following increased demand for the US currency from importers.
Forex dealers attributed the rupee's fall to sustained demand for dollar from importers and a lower opening in the stock market.
They said, however, government's move to push forward economic reforms and strengthening of euro against the dollar in the global markets, capped rupee's losses.
The rupee had closed 14 paise lower at 54.46 a dollar in the previous session.
Meanwhile, the BSE benchmark Sensex was down by 18.41 points, or 0.09%, at 19,210.85 in the opening trade on Friday.