The rupee on Monday depreciated by 16 paise to 68.58 against the US dollar in early trade, mainly due to heavy selling in domestic equities and foreign fund outflows.

However, weakening of the American currency in the overseas market, and easing crude oil prices restricted the rupee's decline, forex traders said.

The rupee came under pressure following heavy selling in domestic equities amid outflow of foreign funds, they added.

The BSE Sensex crashed 405.67 points, or 1.03 per cent, to trade at 39,107.72 Monday. Similarly, the broader Nifty sank 128 points, or 1.08 per cent, to 11,683.15.

At the interbank foreign exchange, the local unit opened weak at 68.49 per dollar and fell further to quote at 68.58, showing a decline of 16 paise over its previous close.

The rupee on Friday settled 8 paise higher at 68.42 against the dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.07 per cent to 97.21.

Meanwhile, Brent crude futures, the global oil benchmark, declined 0.02 per cent to trade at USD 64.22 per barrel.

Foreign institutional investors (FIIs) were nett sellers in the capital markets, pulling out Rs 89.38 crore Friday, while domestic institutional investors bought shares worth Rs 275.63 crore, as per provisional data.

The 10-year government bond yield was at 6.64 per cent in the morning trade.