However, the rupee in 2016 witnessed a loss of 177 paise, or 2.68 per cent, against the dollar as compared to its last year's closing level of 66.15. The domestic currency touched a record low of 68.86 on November 24, 2016 this year.
The rupee opened higher at 67.95 per dollar as against yesterday's closing level of 68.10 at the Interbank Foreign Exchange (Forex) Market and hovered in a range of 67.85 and 67.99 before ending at 67.92 per dollar, showing a gain of 18 paise or 0.26 per cent.
Meanwhile, the dollar index was trading down by 0.42 per cent at 102.22 against a basket of six currencies in the late afternoon trade.
Overseas,the euro jumped to its highest in three weeks in holiday-thinned Asian trade, while a drop in US treasury yields on waning risk appetite reduced the greenback's appeal.
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Country's foreign exchange reserves surged for the second
consecutive week by USD 932.4 million to USD 360.775 billion in the week to January 20 on account of rise in foreign currency assets.
Meanwhile, domestic equities succumbed to modest profit-taking after recent steep rally amid concerns over US policies which weighed on IT stocks even as investors turned cautious ahead of the upcoming Budget on Wednesday.
Meanwhile, the benchmark Sensex drifted 32.90 points to end at 27,849.56, while broader Nifty lost 8.50 points to 8,632.75.
In the forward market, premium for dollar continued to trade lacklustre in the absence of any market moving factors.
The benchmark six-month premium for June softened to 133-135 paise from 134.25-135.25 paise and the far-forward December 2017 contract also eased to 275.5-277.5 paise from 276.25-278.25 paise on last Friday.
Crude prices pulled back on Monday following a steep increase in US drilling activity spread concern over rising oil output as oil producing nations are trying to comply with a deal to pump less in an attempt to prop up prices.