The Indian rupee tumbled 29 paise to close at an over six-month low of 71.43 against the US dollar on Monday amid growing worries over an economic slump and sustained foreign fund outflows.

Further, rising crude oil prices and strengthening of the US dollar vis-a-vis other currencies overseas also took toll on the Indian currency.

Forex traders said investors are awaiting government intervention to revive the slowing economy. There are expectations that the government would come out with sector-specific stimulus sometime soon.

At the interbank foreign exchange market, the rupee opened on a weak note and fell to a day's low of 71.48 against the US dollar. The domestic currency finally settled at 71.43 against the US dollar, slipping 29 paise over the previous close. This is the lowest level for the local unit since February 7, when it had closed at 71.45 a dollar.

On Friday, the rupee had settled at 71.14 against the US dollar.

"Rupee on Monday has under-performed significantly to the other Asian currencies. Brent crude has been inching up for last two sessions," said V K Sharma, Head-PCG & Capital Market Strategy, HDFC Securities.

Sharma further said that the US dollar was hovering near two-week highs against a currency basket on Monday as US Treasury yields bounced back from recent lows amid hopes that major economies will seek to prop up slowing growth with fresh stimulus.

Next major support for the rupee is seen at 72.40 odd levels, he said.

Meanwhile, the 10-year government bond yield was at 6.58 per cent on Monday. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.07 per cent to 98.21.

Brent crude futures, the global oil benchmark, rose 0.85 per cent to trade at USD 59.14 per barrel.

In a worrisome trend, foreign fund outflows have further dented market sentiment.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 305.74 crore on Monday, according to provisional exchange data.

On the domestic market front, the 30-share Sensex settled 52.16 points, or 0.14 per cent, higher at 37,402.49. It hit an intra-day high of 37,718.88 and a low of 37,358.49. The broader NSE Nifty too settled 6.10 points, or 0.06 per cent, up at 11,053.90. During the day, it hit a high of 11,146.90 and low of 11,037.85.

According to Rajesh Cheruvu, CIO, Validus Wealth, this week the focus will be on the Reserve Bank of India (RBI), Federal Open Market Committee (FOMC) and European Central Bank (ECB) minutes, the annual Jackson Hole Symposium of central bankers and Fed chair Powell's speech, among others.

"In light of the myriad of events this week, volatility should persist in the INR trade with the rupee likely to remain muted," Cheruvu said.

Meanwhile, Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.2872 and for rupee/euro at 79.1468. The reference rate for rupee/British pound was fixed at 86.3269 and for rupee/100 Japanese yen at 67.17.