Mumbai: The rupee on Thursday lost 16 paise to 54.59 against the dollar in early trade on the Interbank Foreign Exchange due to continued capital outflows and increased demand from importers for the US currency.
Besides, dollar's gains against euro overseas also put pressure on the rupee.
Dealers attributed the rupee's fall to increased capital outflows by foreign funds and a lower opening in the stock market.
The rupee had weakened by 17 paise to close at three- week low of 54.43 a dollar in yesterday's trade.
Meanwhile, the BSE benchmark Sensex was down by 172.94 points, or 0.92 percent, at 18,628.70 in early trade today.