The Indian rupee on Monday extended the previous session's weakness and depreciated by 20 paise to 46.60 against the US currency in early trade on the back of dollar's rise against other major currencies and Asian units.
However, expectations of fresh capital inflows by foreign funds capped rupee's losses.
At the Interbank Foreign Exchange (Forex) market, the domestic unit traded 20 paise down at 46.60 a dollar. The rupee ended 6 paise lower at 46.40/41 against the US currency in the previous session on Friday.
Forex dealers said dollar's gain against other currencies and increased demand for it from importers put pressure on the Indian rupee.
Besides, covering-up of short positions (in dollars) by traders also weighed on the rupee, they said.