The rupee declined 3 paise to 83.15 against the US dollar in a restricted trade on Monday due to a stronger greenback in overseas markets and foreign fund outflows.
A correction in crude oil prices and firm domestic stock markets in opening trade capped the losses of the rupee, according to forex dealers.
The local unit opened lower by 3 paise at 83.15 against the greenback at the interbank foreign exchange market.
The rupee moved in a tight range of 83.15 to 83.09 against the dollar in morning deals before trading at 83.15. It had closed almost flat at 83.12 on Friday.
Foreign Portfolio Investors (FPIs) have withdrawn over Rs 12,000 crore from Indian equities so far this month, mainly due to a sustained rise in US bond yields and the uncertain environment resulting from the Israel-Hamas conflict.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.12 per cent to 106.30.
Oil prices eased on Monday with the global oil benchmark Brent crude declining 0.79 per cent to USD 91.43 per barrel.
On the domestic equity market front, Sensex rose 9.55 points or 0.01 per cent to 65,407.17 points while broader Nifty was up 3.8 points or 0.02 per cent at 19,546.45 points.