The rupee slipped 1 paisa to close at its fresh life-time low of 78.34 (provisional) against US dollar on Monday despite a rally in the domestic equity markets.
Firm crude oil prices in the international market and unabated foreign capital outflows put pressure on the domestic unit.
However, a weak dollar overseas supported the local currency, forex dealers said.
At the interbank forex market, the local unit opened sharply higher at 78.24 against the greenback, but paired all of its initial gains to settle at 78.34.
It witnessed an intra-day high of 78.24 and a low of 78.36.
In the previous session, the rupee had settled at 78.33 against the greenback.
On the domestic equity market front, the BSE Sensex ended 433.30 points or 0.82 per cent higher at 53,161.28, while the broader NSE Nifty rose 132.80 points or 0.85 per cent to 15,832.05.
The dollar index, which measures the greenback's strength against a basket of six currencies, slipped 0.21 per cent to 103.97.
Brent crude futures, the global oil benchmark, rose 0.32 per cent to $113.48 per barrel.
Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 2,353.77 crore, as per exchange data.