Forex traders said while positive domestic equities supported the local unit, market participants were concerned about the impact of spiking coronavirus cases on the economy.
The local unit opened at 75.55, then lost further ground and finally settled at 75.73 against the greenback, down 19 paise over its previous close.
It had settled at 75.54 against the US dollar on Friday.
During the day, the local unit saw an intra-day high of 75.55 and a low of 75.77.
In India, the death toll due to COVID-19 rose to 2,206 and the number of cases climbed to 67,152 in the country, according to the Health Ministry.
Meanwhile, the number of cases around the world linked to the disease has crossed over 41.02 lakh and the death toll has topped 2.8 lakh.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.33 per cent up at 100.06.
Brent crude futures, the global oil benchmark, fell 1.97 per cent to USD 30.36 per barrel.
Domestic bourses were trading on a positive note on Monday with the benchmark Sensex up 114.37 points at 31,757.07 and broader Nifty rising 71.90 points to 9,323.40.
Foreign institutional investors were net buyers in the capital market, as they bought equity shares worth Rs 1,724.71 crore on Friday, according to provisional exchange data. DRR BALBAL