The Indian rupee depreciated 21 paise to 74.65 against the US dollar in opening trade on Wednesday, as rising crude prices and strength of the American currency in the overseas market weighed on investor sentiments.

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At the interbank foreign exchange, the rupee opened on a weak note at 74.63, then fell further to 74.65, registering a decline of 21 paise from the last close.

On Tuesday, the rupee had settled at 74.44 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.14 per cent to 94.11.

According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, there was no effect of Moody's upgrade of India's rating outlook to 'stable' from 'negative', on the rupee as the sovereign rating has not been restored.

International ratings agency Moody's on Tuesday upgraded India's rating outlook to 'stable' from 'negative', saying a recovery is underway in Asia's third-largest economy and growth this fiscal will surpass the pre-pandemic rate.

Moody's Investors Service however kept India's sovereign rating at 'Baa3' -- which is the lowest investment grade, just a notch above junk status.

In fact, as oil touches USD 83 per barrel, the rupee has weakened, Bhansali said, adding that the range for the rupee would be 74.30 to 74.80.

"Rupee is awaiting for monetary policy which is starting today. Exporters to sell only above 74.80 and importers to buy near 74.40/45 levels for their near-term exposure," he noted.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 1,915.08 crore, as per exchange data.

On the domestic equity market front, the 30-share Sensex was trading 77.72 points or 0.13 per cent lower at 59,667.16. The broader NSE Nifty was trading 27.45 points or 0.15 per cent down at 17,794.85.

Global oil benchmark Brent crude futures fell 0.08 per cent to USD 82.49 per barrel.