The rupee declined by 10 paise to 79.67 against the US dollar in opening trade on Monday, even as the equity market opened on a positive note.
The rupee was trading at 79.66 against the dollar, then fell to 79.67, registering a decline of 10 paise over its last close. The local unit touched 79.64 against the dollar in initial deals.
On Friday, the rupee appreciated by 12 paise to close at 79.57 against the American currency.
The dollar index, which gauges the strength of the dollar against a basket of six currencies, fell 0.23 per cent to 108.75.
The global oil benchmark of Brent crude futures fell 1.49 per cent to USD 91.46 per barrel.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, Markets are now waiting for India's August inflation data, which is likely to increase to 6.90 per cent from 6.71 per cent in July, adding pressure on RBI to hike interest rates more aggressively in the coming months.
On Monday, the dollar index fell further as investors wait for the data from the US CPI.
On the domestic equity market, the 30 share BSE Sensex was trading 243.2 points or 0.41 per cent higher at 60,036. 34, while the broader NSE Nifty was up 76.55 points or 0.43 per cent to 17,909. As per exchange data, 42 crore were reported.
The country's foreign exchange reserves declined by USD 3.007 billion to USD 561.046 billion in the week ending August 26. The Reserve Bank of India RBI data showed that the country's foreign exchange reserves fell by USD 3.007 billion to USD 561.046 billion.