The rupee fell 3 paise to 81.93 against the US dollar on Monday, as the US currency strengthened against major rivals worldwide.
However, forex dealers claimed that the entry of foreign funds into local equities, combined with a lower trend in oil prices, limited the slide in the domestic unit.
The domestic unit opened lower at 81.93 on the interbank foreign exchange and fluctuated between 82.01 and 81.90 over the day.
The unit closed at 81.93 (provisional) versus the US dollar, down 3 paise from the previous closing.
The rupee closed at 81.90 per dollar on Friday.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, rose 0.29 percent to 102.54.
Crude oil prices were falling, with Brent crude falling 0.16 percent to USD 76.49 per barrel.
The 30-share BSE Sensex slid 216.28 points, or 0.34 percent, to close at 63,168.30, while the wider NSE Nifty fell 70.55 points, or 0.37 percent, to conclude at 18,755.45.
According to exchange data, Foreign Institutional Investors (FIIs) were net purchasers in the capital markets on Friday, purchasing shares worth Rs 794.78 crore.