This is the lowest level for the rupee since February 7, when it had closed at 71.45 a dollar.

"Rupee on Monday has under-performed significantly to the other Asian currencies. Brent crude has been inching up for last two sessions," PTI quoted VK Sharma, head-PCG & capital market strategy, HDFC Securities, as saying.

Mr Sharma further said that the US dollar was hovering near two-week highs against a currency basket on Monday as US Treasury yields bounced back from recent lows amid hopes that major economies will seek to prop up slowing growth with fresh stimulus. Next major support for the rupee is seen at 72.40 odd levels, he said.

This week the focus will be on the Reserve Bank of India, Federal Open Market Committee and European Central Bank minutes, the annual Jackson Hole Symposium of central bankers and Fed chair Powell's speech, the report quoted Rajesh Cheruvu, CIO, Validus Wealth as saying.

"In light of the myriad of events this week, volatility should persist in the INR trade with the rupee likely to remain muted," Mr Cheruvu said.

Brent crude futures, the global oil benchmark, rose 0.85 per cent to trade at $59.14 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs. 305.74 crore on Monday, NSE's provisional data showed.

The domestic equity markets closed higher for the third day in a row. The Sensex rose 52 points or 0.14 per cent to close at 37,402 and the NSE Nifty 50 gained 0.06 per cent or 6 points to 11,054.

The dollar index, which gauges the dollar's strength against a basket of six currencies, rose 0.07 per cent to 98.21. Meanwhile, the 10-year government bond yield was at 6.58 per cent on Monday.