The rupee depreciated 4 paise to 83.02 against the US dollar in early trade on Monday, tracking a strong American currency and rising crude oil prices in the international market.
However, positive cues from the domestic equity markets and inflow of foreign funds supported the Indian currency, forex traders said.
Investors will also keep a close watch on the Reserve Bank's monetary policy decision to be announced later this week, they said.
At the interbank foreign exchange, the rupee opened at 83.03 against the dollar and touched a low of 83.04 before gaining marginally to trade at 83.02, down 4 paise over its previous close.
The rupee settled flat at 82.98 against the dollar on Friday, a day after rising 6 paise on the day of the Union interim budget in which the government hinted at faster fiscal consolidation and lower borrowings in the next fiscal year.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.11 per cent higher at 103.89.
Brent crude futures, the global oil benchmark, rose 0.38 per cent to $77.62 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 124.27 points or 0.17 per cent higher at 72,209.90 points. The broader NSE Nifty advanced 50.90 points or 0.24 per cent to 21,906.70 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth ₹70.69 crore, according to exchange data.
India's forex reserves increased $591 million to $616.733 billion for the week ended January 26, the Reserve Bank of India (RBI) said on Friday.