The rupee lost 13 paise against the dollar to trade at 45.88 in early trade on Tuesday on capital outflows by foreign funds from equity markets.
Dealers said fresh capital outflows by foreign funds from equities in tandem with weak Asian markets mainly dampened the rupee sentiment.
The dollar's gains against other world currencies in overseas markets also weighed on the rupee, they added. The rupee had closed 41 paise higher at 45.75/76 in the previous session.
Meanwhile, the Bombay Stock Exchange index, Sensex, fell by 90.47 points, or 0.50 per cent to 17,786.08 points in the opening trade.