At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced strong at 61.02, which was also the day's high, from last weekend's close of 61.15.
Later, it moved in a range of 61.02 and 61.27 before settling at 61.17, a fall of two paise or 0.03 per cent.
In the previous two sessions, it fell by 34 paise.
The Indian benchmark S&P BSE Sensex today bounced back by 190.10 points, or 0.75 per cent. FIIs pulled out Rs 503.74 crore last Friday, as per provisional data with bourses.
Importers, mainly oil refiners, bought dollars as oil prices rose in Asia.
The dollar index was down by 0.17 per cent against a basket of six major global rivals on geopolitical concerns.
Pramit Brahmbhatt, Veracity Group CEO said,"To start the day rupee opened positive taking cues from strong local equity markets. However, towards the end rupee lost his gains and ended near Friday's close."
The trading range for the Spot USD/INR pair is expected to be within 60.80 to 61.60, he added.
"On the domestic front, we have the inflation and the industrial production figures, scheduled for release tomorrow, which might impact the domestic currency," said Abhishek Goenka, Founder & CEO, India Forex Advisors.
In the forward market, premium remained weak on sustained receipts by exporters.
The benchmark six-month premium payable in January declined to 239.5-241.5 paise from 243-245 paise last Friday.
Far-forward contracts maturing in July, 2015 also dipped to 483-485 paise from 488-490 paise.
The Reserve Bank of India fixed the reference rate for dollar at 61.1165 and for the euro at 81.8740.
The rupee continued its upward march against the pound to close at 102.64 from 102.79 while recovered to 59.90 per 100 Japanese yen from 59.97.
However, it fell back slightly against the euro to 81.92 from 81.88 last Friday.