The rupee declined by 18 paise to close at 73.30 (provisional) against the US currency on Monday on strong American currency and risk aversion in the domestic market amid concerns over rising COVID-19 cases.
Besides, losses in domestic equity markets weighed on investors' sentiment.
At the interbank forex market, the local unit opened at 73.38 against the greenback and traded in the range of 73.28 to 73.45 during the day.
The rupee finally ended at 73.30 against the American currency, registering a fall of 18 paise over its previous closing of 73.12. The forex market was closed on April 2, on account of Good Friday.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 93.06.
"The Indian Rupee depreciated amid a strong dollar and risk aversion in the domestic markets. The dollar is gaining strength amid a surge in US treasury yields and upbeat economic data," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.
Further, the rupee may slip on concern over rising COVID-19 cases in India.
India reported more than 1 lakh cases of coronavirus for the first time. Maharashtra government announced new restrictions, including night curfews and weekend lockdowns.
"However, sharp fall was prevented on softening of crude oil prices. Rupee may trade in the range of 72.80 to 74.0 in the next couple of sessions," Mukadam added.
Brent crude futures, the global oil benchmark, was trading 2.05 per cent down at USD 63.53 per barrel.
On the domestic equity market front, the BSE Sensex ended 870.51 points or 1.74 per cent lower at 49,159.32, while the broader NSE Nifty declined by 229.55 points or 1.54 per cent to 14,637.80.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 149.41 crore on Thursday, according to exchange data.
For in-depth, objective and more importantly balanced journalism, Click here to subscribe to Outlook Magazine