Trading volumes were also lower as employees at state-run banks started a two-day strike on Monday. Although dealing rooms were fully operational, employees dealing with retail customers - who account for around one-fifth of daily trading volumes - were absent.
Caution also prevailed ahead of a week full of key reports, including the January trade data sometime this week, and consumer price index and industrial production on Wednesday.
The weaker end to the rupee contrasts with most emerging Asian currencies, which crawled higher as regional shares gained .
All over the world investors will be paying keen attention to Federal Reserve Chair Janet Yellen's testimony before the U.S. Congress on Tuesday and again on Thursday, which could provide clues about her stance on the U.S. central bank's wind down of its monetary stimulus.
The rupee closed at 62.43/44 per dollar compared with Friday's close of 62.2825/2925.
The rupee started stronger on Monday on hopes of dollar inflows following the strong demand at the telecom spectrum auction, but lack of large flows and demand from importers pushed the rupee down in the second half.
The market is continuing to expect inflows in connection to positive response to telecom spectrum auction but dollar demand will also be strong.The forecast for the week USD/INR to be in the range of 62.10-62.70.
In the offshore non-deliverable forwards, the one-month contract was at 62.74, while the three-month was at 63.60.