The rupee pared initial gains to settle almost flat against the US dollar on Monday as subdued domestic equities offset the impact of a sharp decline in global crude oil prices.
A strengthening American currency overseas and continuous foreign fund outflows also weighed on the domestic unit, forex traders said.
At the interbank foreign exchange market, the rupee opened slightly higher at 76.48 against the American dollar and gained further ground to trade at 76.35. It oscillated between a high of 76.35 and a low of 76.51 during the session.
The rupee finally settled at 76.51 against the dollar, showing a marginal fall of 1 paisa.
Brent crude futures, the global oil benchmark, declined 2.61 per cent to USD 104.34 per barrel.
On the domestic equity market front, the 30-share BSE Sensex ended 84.88 points or 0.15 per cent lower at 56,975.99, while the broader NSE Nifty fell 33.45 points or 0.20 per cent to 17,069.10.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.43 per cent to 103.37.
Foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 3,648.30 crore, as per the exchange data.
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