The rupee closed at 60.59/60 per dollar after hitting 60.61, its lowest since March 24 and weaker than Thursday's close of 60.29/30. The unit fell 0.5 percent, its biggest single-day fall since March 20.
Falls in the rupee were capped as domestic shares hit record highs, surpassing previous all-time highs hit on April 10, as banks rallied ahead of their financial results starting this week.
Analysts expect the rupee to remain in a tight range due to caution about ongoing national elections, with Mumbai set to go to the polls on Thursday.
It would not be wise to take a strong view that INR will continue to trade with an appreciating bias. Global markets may sell off because of escalating Ukraine situation, more Chinese slowdown data and if U.S. tightening discussions start.
Indian markets were closed on Friday. Some global markets were closed on Monday on account of the Easter weekend, affecting trading volumes slightly.
Most emerging Asian currencies eased on Monday as an agreement reached last week to avert wider conflict in Ukraine was seen faltering, with pro-Moscow separatist gunmen showing no sign of surrendering government buildings they have seized.
However, continued gains in shares could help support the rupee should they be backed by strong foreign buying. Net purchases of nearly $4.8 billion in shares so far in 2014 sent the rupee to an eight-month high of 59.5950 in early April.
Overseas investors were net buyers of $71.20 million on Thursday, snapping a three-day selling streak, but have been net sellers of debt in the last eight out of nine sessions.
In the offshore non-deliverable forwards, the one-month contract was at 60.99 while the three-month was at 61.77.