The rupee pared its initial gains and settled for the day lower by 4 paise at 83.14 (provisional) against the US dollar on Monday, mirroring the benchmark indices that erased their gains and ended the day off their record-high levels.

Forex traders said the rupee settled in a narrow range as the weakness of the American currency in the overseas market supported the rupee, while elevated crude oil prices in the international market restricted the upmove.

At the interbank foreign exchange, the local unit opened at 83.08, then touched an intra-day high of 83.05 but soon pared the gains and settled for the day lower by 4 paise at 83.14 (provisional) against the American currency.

On Friday, the rupee rallied for the fourth consecutive trading session and settled with a sharp gain of 19 paise at 83.10 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.67, lower by 0.05 per cent.

Brent crude futures, the global oil benchmark, advanced 0.47 per cent to $82.51 per barrel.

"We expect the rupee to trade with a positive bias on positive domestic equities and expectations of fresh foreign inflows. However, a strong US dollar and a recovery in crude oil prices may cap sharp upside," Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas said.

US markets will remain closed on Monday on Memorial Day holiday. Investors may remain cautious ahead of core PCE price index data later this week. USD-INR spot price is expected to trade in a range of ₹82.80 to ₹83.30, Choudhary added.

On the domestic macroeconomic front, India's forex reserves jumped $4.549 billion to a new all-time high of $648.7 billion for the week ended May 17, the Reserve Bank said on Friday.

This is the third consecutive week of increase in the overall kitty, which had increased by $2.561 billion to $644.151 billion in the previous reporting week ended May 17.

On the domestic equity market, the 30-share BSE Sensex declined 19.89 points, or 0.03 per cent, to close at 75,390.50 points. The broader NSE Nifty settled 24.65 points or 0.11 per cent lower at 22,932.45 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth ₹944.83 crore, according to exchange data.