The rupee resumed lower at 62.40 per dollar compared with the previous close of 62.31 at the interbank foreign exchange market.
It hovered in a range of 62.43 to 62.34 and was quoted at 62.42 per dollar at 1045 hours.
Banks and importers sought to increase their dollar positions, a forex dealer said. Capital outflows from foreign funds also affected market sentiment as foreign institutional investors sold shares worth a net Rs 318.91 crore (Rs 3.18 billion) on Monday.
In New York, the dollar fell against other major currencies on Monday after a December reading on the US services sector came in below market expectations.
Image: A forex dealer counts rupee notes in Mumbai. Photographs: Punit Paranjpe/Reuters