Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, increased 0.16 percent to 102.01.
Digital Desk: The rupee fell 5 paise to 81.95 against the US dollar in early trade on Thursday.
At the interbank foreign exchange, the domestic unit opened weak at 81.95 against the dollar, down 5 paise from its previous close. The local currency reached a high of 81.88 against the US dollar in early trade.
"Today, the RBI will release its monetary policy outcome, which will focus attention on the INR because markets have already factored in a 25-basis point rate hike by the RBI," CR Forex Advisors MD Amit Pabari said.
The RBI's rate-setting panel began its three-day meeting on Monday amid expectations that the central bank will hike the benchmark interest rate by 25 basis points, likely the last in the current monetary tightening cycle that began in May 2022.
Pabari also stated that the Monetary Policy Committee, led by Reserve Bank Governor Shaktikanta Das, would maintain its option to hike by maintaining its 'withdrawal of accommodative' stance and tightening policy.
"However, if the RBI Governor hints at a further pause in interest rates or surprises with a smaller rate hike in his speech, it will harm the local unit," he said.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, increased 0.16 percent to 102.01.
Brent crude futures fell 0.92 percent to USD 84.21 per barrel, the global oil benchmark.
The 30-share BSE Sensex was trading 89.46 points, or 0.15 percent, lower at 59,599.85 points in the domestic equity market. The NSE Nifty fell 22.45 points, or 0.13 percent, to 17,534.60 points.
According to exchange data, Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, purchasing shares worth Rs 806.82 crore.
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