The rupee declined by 26 paise to Rs 51.37 per dollar on the Interbank Foreign Exchange in early trade today on increased demand from importers for the American currency.
Besides dollar's gains against other currencies overseas and a weak opening in the equity market put pressure on the local currency, traders said.
Meanwhile, the BSE benchmark Sensex lost 161.61 points, or 0.92 per cent, at 17,324.41 in early trade.
The rupee had lost 39 paise to close below the 51-level at 51.11/12 against the dollar in the previous session on Wednesday due to fresh dollar demand from importers.
The forex and money markets were closed on Thursday and Friday on account of 'Mahavir Jayanti' and 'Good Friday', respectively.
