The rupee opened 8 paise higher at 85.43 against the US dollar from its previous close, before falling to 85.46. The rupee had settled at 85.51 against the US dollar on Wednesday.

Pakistan hikes its defence budget by 20 percent after border clashes with India, economy remains reliant on IMF loans.

USD/INR opens flat while the Indian Rupee depreciates against its other peers ahead of the Indian CPI data for May.