The Indian rupee fell 18 paise to close at 73.68 (provisional) against the US dollar on Monday, tracking a strong American currency in the overseas market and muted trend in domestic equities.

At the interbank foreign exchange market, the local currency opened at 73.63 and dropped to a low of 73.73 in the day trade.

The domestic unit finally settled at 73.68 against the greenback, down 18 paise over its previous close.

In the previous session on Thursday, the rupee had settled at 73.50 against the US dollar.

The forex market was closed on Friday on account of ‘Ganesh Chaturthi’.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.19 per cent higher at 92.75.

"Indian rupee started the week on back foot amid recovery in dollar ahead of US inflation data on Tuesday and lacklustre risk assets," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar further noted that Monday's price actions in rupee were on back of recovery in dollar index on Friday, the day the domestic markets were closed on account of 'Ganesh Chaturthi'.

Until the market makes up its mind, perhaps not until the next Federal Open Market Committee (FOMC) scheduled next week, rather dull trading conditions are likely to persist, he noted.

Brent crude futures, the global oil benchmark, rose 1.12 per cent to USD 73.74 per barrel.

On the domestic equity market front, the BSE Sensex ended 127.31 points or 0.22 per cent lower at 58,177.76, while the broader NSE Nifty declined 13.95 points or 0.08 per cent to 17,355.30.

Foreign institutional investors were net buyers in the capital market on Thursday as they purchased shares worth Rs 423.44 crore, as per exchange data.