The rupee fell by 6 paise to 81.96 against the US dollar in early trade on Monday amid a strong American currency against major rivals overseas.
FII inflows into local equities and falling crude price failed to support the Indian currency, analysts said.
At the interbank foreign exchange, the domestic unit opened lower at 81.93 and hit the lowest level of 81.98 before trading at 81.96, registering a fall of 6 paise over its previous close.
On Friday, the rupee settled at 81.90 against the dollar.
Crude oil prices were trading lower on Monday with the benchmark Brent crude slipping 1.46 per cent to USD 75.49 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was up 0.10 per cent at 102.35.
In the domestic equity market, the 30-share BSE Sensex was trading 179.17 points or 0.28 per cent higher at 63,563.75. The broader NSE Nifty rose by 47.75 points or 0.25 per cent to 18,873.75.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth Rs 794.78 crore, according to exchange data.
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