The rupee depreciated 42 paise to 82.50 against the US dollar in early trade on Monday, weighed down by a strong American currency and a muted trend in domestic equities.
According to Forex traders, ongoing withdrawals of foreign funds and high crude oil prices further dampened investor morale.
At the interbank foreign exchange, the local unit started out weakly versus the dollar at 82.35 before dropping to 82.50 and losing 42 paise from its previous level.
In the previous session on Friday, the rupee settled at 82.08 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 103.09.
The benchmark for world oil, Brent crude futures, increased 0.25 percent to USD 80.14 a barrel.
As retail inflation is beginning to moderate and the US Fed is slowing the rate of increase in its benchmark interest rate, the Reserve Bank is expected to opt for a modest 25 basis point repo rate increase in its upcoming bi-monthly monetary policy announcement due later this week.
In the domestic equity market, the 30-share BSE Sensex was trading 242.95 points or 0.40 per cent lower at 60,598.93. The broader NSE Nifty declined 100.20 points or 0.56 per cent to 17,753.85.
According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs 932.44 crore on Friday, making them net sellers in the capital markets.
With inputs from Agencies.
