The rupee is at 63.08/09 versus Monday's close of 63.10/11 as investors cautious ahead of the RBI's monetary policy review due at 11 a.m. where it is widely expected to hold rates steady.
RBI Governor Raghuram Rajan's outlook on the future rate trajectory and his comments on the monetary policy committee report will be keenly watched. Any hawkish outlook may lead to a stock selloff, pressuring INR, traders say.
The pair is seen holding in a 62.80 to 63.30 range until the policy review outcome.
The BSE Sensex up 0.2 percent.
The dollar regained a firmer footing against the yen on Tuesday, as expectations the U.S. Federal Reserve will scale back its stimulus further pulled the U.S. currency off a seven-week low against its Japanese counterpart.