The rupee declined by 26 paise to 85.66 against the US dollar in early Monday trade, weighed down by foreign fund outflows and a weak start in domestic equity markets.
Adding pressure to the local currency, the US on Sunday intensified its push for trade agreements ahead of the July 9 deadline, cautioning that higher tariffs may take effect from August 1.
However, the rupee's losses were limited by a softer US dollar, easing global crude oil prices, and an uptick in India's foreign exchange reserves, forex traders said.