The rupee declined by 14 paise to settle at 76.53 against the dollar on Monday amid strengthening of the US currency overseas and a sharp rise in coronavirus cases in the country.

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Forex traders said a firm US dollar weighed on the local unit. Besides, investor sentiment remains fragile amid concerns over the impact of coronavirus outbreak on the domestic as well as the global economy.

At the interbank foreign exchange, the rupee opened strong at 76.43, but soon lost ground and finally settled at 76.53, registering a fall of 14 paise over its previous close.

During the session, the rupee witnessed high volatility and touched a high of 76.43 and a low of 76.68 against the US dollar.

Domestic stocks closed almost flat after volatile trade. After swinging over 566 points during the day, the 30-share index ended 59.28 points or 0.19 per cent higher at 31,648. The NSE Nifty settled 4.90 points, or 0.05 per cent, lower at 9,261.85.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.15 per cent to 99.93.

The number of cases around the world linked to the new coronavirus has crossed over 24 lakh. In India, more than 17,200 coronavirus cases have been reported so far.

Brent crude futures, the global oil benchmark, fell 3.81 per cent to USD 27.01 per barrel.

Foreign institutional investors (FIIs) were net sellers in the capital markets, as they sold shares worth Rs 1,391.98 crore on Friday, according to the provisional exchange data.

Forex traders said the weakness in the domestic unit was following weaker Asian currencies and a sharp rise in coronavirus cases in the country.

"Asian currencies declined after China's central bank lowered its one-year loan prime rate which could force other emerging market central banks to lower short term rate to bolster the domestic economy in absence of foreign trade," said Devarsh Vakil- Head Advisory, HDFC Securities.

According to HDFC Securities, the rupee is likely to remain relatively stable going forward. Lower crude oil prices and some respite from foreign fund sell-off is expected to support the domestic unit.

"RBI already has done the Forex swap of USD 2 billion in March along with the rate cut to support the economy. Going forward, the announcement of new swap window with foreign nations and central bank intervention will prevent further weakness," Vakil said.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 76.5444 and for rupee/euro at 83.0542. The reference rate for rupee/British pound was fixed at 95.4657 and for rupee/100 Japanese yen at 71.04.

"We expect volatility for the dollar against its major crosses could also remain low as no major economic data is expected to be released from the US. We expect the rupee (Spot) to quote in the range of 76.20 and 77.20," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.