The rupee on Monday closed 11 paise lower at 76.55 (provisional) against the US dollar amid softening crude oil prices and foreign fund outflow.
Forex dealers said higher inflation also affected the market sentiment.
However, a rally in the stock markets limited the rupee’s fall.
The rupee opened at 76.63 against the US dollar in the interbank foreign exchange market. It recovered some of the lost ground during the session, but remained in negative territory as investors turned to safe-haven assets.
During the day it moved between the high of 76.52 and the low of 76.69.
The local unit finally closed at 76.55 against the dollar, down 11 paise from its previous close.
Traders said the uncertainty surrounding the war in Ukraine and persistently high inflation kept investors away from riskier assets.
Wholesale price-based inflation in February rose to 13.11% on the hardening of crude and non-food prices, even as food articles moderated.
After two months of mild easing, WPI inflation intensified in February and remained in double digits for the 11th consecutive month starting April 2021.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.39% lower at 98.79.
On the domestic equity market front, the 30-share Sensex closed 935.72 points or 1.68% higher at 56,486.02, while the broader NSE Nifty ended 240.85 points or 1.45% higher at 16,871.30.
Global oil benchmark Brent crude futures slipped 3.28% to $108.97 a barrel.
Foreign institutional investors continued their sell-off in the Indian markets as they offloaded shares worth Rs 2,263.90 crore on a net basis on Friday, according to exchange data.