The rupee came off near two-week highs to close lower on Monday, ending a two-day winning streak, as corporate inflows and a strong domestic stock market was outweighed by a late surge in dollar demand from oil importers.
Still, the rupee has recovered substantially from a record low of 60.76 hit on June 26 as a revival of global risk appetite and rumoured inflows related to Unilever's open offer for its Indian unit kept the rupee bid.
Sentiment for the rupee was also supported as provisional data showed foreign institutional investors bought shares worth 11.24 billion rupees on Friday, snapping 13 days of sales, though they remained net sellers in debt.
Investors are also hoping the government would soon announce additional economic reforms centering on opening up more sectors for foreign investments after last week approving a hike in domestic gas prices.
"The rupee gained on corporate inflows and NDF (non-deliverable forward) related selling during the first half, but good bids from oil importers pulled down the rupee later," said Hari Chandramgethen, chief of forex trading at South Indian Bank.