The current government is set to present its last Budget Friday, which is expected to have major announcements to support the farm sector and spur consumption.
At the Interbank Foreign Exchange, the rupee opened at 71.08 then fell further to 71.17 against the US dollar, showing a decline of 9 paise over its previous closing.
However, positive opening in domestic equities and fresh foreign fund inflows capped the losses for the domestic unit.
Foreign funds bought shares worth Rs 3,006.41 crore from the capital markets on a net basis Thursday, while domestic institutional investors sold shares worth Rs 1,634.32 crore, provisional data showed.
The global benchmark, brent crude oil was trading at $61.49 per barrel, higher by 0.28 per cent.
Meanwhile, domestic equity market opened on a higher note. The 30-share BSE benchmark Sensex, was trading at 36,364.70, up 106.13 points in early trade. The wide-based Nifty was also trading up by 30.20 points at 10,861.15.