The Indian rupee today depreciated by 16 paise to 61.68 against the US dollar in early trade on the Interbank Foreign Exchange market due to increased demand for the US currency from importers ahead of the RBI's policy review meeting.

The Indian rupee had lost six paise to close at 61.52 against the US dollar in yesterday's range-bound session in line with a fall in local equities.

Dealers attributed the rupee fall to a cautious approach adopted by participants ahead of the RBI's second quarter monetary policy review today. Dollar's strength against other currencies overseas also weighed on the Indian unit, they said.

Besides, a lower opening in the domestic equity market too weighed on the rupee, they said.

Meanwhile, the BSE benchmark BSE Sensex fell by 38.50 points, or 0.19 per cent, to trade at 20,531.78 in early trade today.

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