The Indian rupee fell for a second session in a row as dollar demand from state-run banks for oil-and defence-related payments offset a recovery in shares after a five-day losing streak.
India's NSE index rose nearly 1 percent on Tuesday as rate-sensitive stocks surged after data late on Monday showed consumer inflation in June slowed to the lowest since the figures were published in January 2012.
Traders expect the rupee to remain range-bound in the near-term, with markets also focused on Federal Reserve Chair Janet Yellen's
congressional testimony due later on Tuesday.
"We see the dollar-rupee pair trading steady in the near term, largely in the range of a rupee," said Uday Bhatt, senior manager at state-run UCO Bank.
The partially convertible rupee ended at 60.12/13 per dollar compared with 60.07/08 on Monday.
State-run banks have been mopping up dollars for oil- and defence-related payments in the recent sessions. Some of this demand could be for the government's effort to pay Iran a part of its oil dues, dealers said.
In the offshore non-deliverable forwards, the one-month contract was at 60.33/43 , while the three-month was at 60.85/95.
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The Indian rupee fell for a second session in a row as dollar demand from state-run banks for oil-and defence-related payments offset a recovery in shares after a five-day losing streak.