The Indian rupee opened lower 4 paise or 0.09 per cent against US dollar at Rs 54.35 in the morning trade on Thursday, from the previous day's close of 54.30, as the country is waiting for the official inflation figures for the month of February.

February inflation figures can be announced anytime today, and any reading of below 6.5 per cent will encourage the Reserve Bank of India (RBI) to bring key interest rates down.

RBI Governor D Subbarao yesterday allayed CAD fears, and hinted that the central bank would bring interest rate down in its mid-quarter policy review meeting on March 19.

Commenting on the decline in the rupee, Emkay Global Financial Services said, "We expect INR to weaken today as inflation data today can trigger the hope of rate cut and weaken the currency."

Emkay added that the United States' positive retail sale data has also helped the dollar to edge higher against majority of the world currencies.

Emkay also said that USDINR could extend its corrective drops towards 200-day EMA of 54.06 levels, and the prices may jump towards 54.55 and eventually to 54.79 levels.

In the spot market, USD-Japanese Yen was trading at 95.92, down 0.22 per cent; while Euro-USD was trading at 1.29, down 0.02 per cent.