The rupee appreciated 2 paise to 82.89 against the US dollar in early trade on Monday on the back of foreign funds inflow and retreating crude oil prices in the overseas market.
Forex traders said subdued equity market sentiment and a strengthening American currency weighed on the domestic unit.
Also, they said investors adopted a cautious approach ahead of inflation and other macroeconomic data to be released in India, as well as in the US later this week.
At the interbank foreign exchange, the local currency opened at 82.88 and slipped further to 82.89 against the greenback, registering a gain of 2 paise from the previous close.
On Friday, the rupee settled 6 paise lower at 82.91 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.06 per cent higher at 103.92.
Brent crude futures, the global oil benchmark, was trading 0.45 per cent lower at $82.25 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 219.37 points or 0.30 per cent lower at 72,923.43 points. The broader NSE Nifty declined 51.10 points or 0.23 per cent to 22,161.60 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased worth Rs 1,276.09 crore, according to exchange data.
India's forex reserves declined $5.24 billion to $617.23 billion for the week ending February 9, according to weekly data released by the Reserve Bank of India (RBI) on Friday.