Besides, expectations on a further stimulus has fanned fears of higher government borrowings.
Nonetheless, rising virus infection in the US amid hopes of more stimulus is expected to keep the US dollar subdued.
Consequently, the rupee is projected to range between 73.70 to 74.50 per greenback.
"Flows into equity markets have been robust and supported the rupee," said Sajal Gupta, Head, Forex and Rates, Edelweiss Securities.
As per estimates, more than Rs 25,000 crore have flown into the country's stock markets till now during November.
"However, we expect the flows to slow down going forward and that can put some pressure on rupee and rising imports owing to normalisation can also keep strong rupee in check."
Last week, rupee appreciated to 74.11 levels but saw strong support at 74 handle.
Nonetheless, dollar purchases from RBI as reflected in the forex reserve capped further appreciation.
On Friday, official data showed that India's foreign exchange reserves rose $4.277 billion during the week ended November 13.
Accordingly, the reserves increased to $572.771 billion from $568.494 billion reported for the week ended November 6.
The RBI is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.
"RBI as expected supported Rupee this week and bought dollars in the spot market," said Devarsh Vakil, Deputy Head of Research at HDFC Securities.
"74 is a strong support for the USD/INR pair and it is unlikely that RBI will allow it to appreciate much further from 74 mark this week. On the higher side 74.5 will act as a resistance this week."
According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services: "Rupee gained but in the last four weeks the currency has consolidated in a range 73.70 and 74.70 despite sharp gains in domestic and global equities."
"Next week, global factors will continue to remain in focus. Preliminary manufacturing PMI number will be released from the US, EZ and the UK will be important to watch."
"Apart from this, from the US, preliminary GDP and consumer spending number will be in focus and better-than-expected number could support the dollar at lower levels that have been under pressure in the past few weeks."
(Rohit Vaid can be contacted at email@example.com)