The rupee ended 23 paise lower at 55.11 against the dollar on Monday due to capital outflows in the domestic equity markets.
Breaching the 55-mark, the Indian unit opened weaker at 55.06 against the dollar compared to the previous close of 54.88 on Friday.
The BSE-benchmark Sensex closed down by 62 points (0.31 per cent) at 20,224 points.
However, the unit recovered to 54.96 per dollar in the afternoon trades after the equity markets recovered from its lows.
Later, the rupee further weakened to 55.13 at the Interbank Foreign Exchange market due to capital outflows.
The rupee depreciated on concerns of continued lag of the looming current account deficit raised by global ratings agency Standard and Poor’s last week.
The Indian currency is likely to remain around 54 levels during the week ahead on hopes of key interest rate cut by the Reserve Bank of India in its mid-quarter monetary policy in June.
Call, bond rates down
The interbank call money rates ended slightly higher at 7.30 per cent from Friday’s close of 7.25 per cent.
The 8.15 per cent government security (G-Sec), which matures in 2022, ended sharply higher at Rs 105.30 after opening flat from its previous close of Rs 104.85. Yields dropped to 7.33 per cent from a close of 7.40 per cent on Friday.