The rupee was at 82.8850 to the U.S. dollar at 11:04 a.m. IST compared with 82.8775 in the previous session. The local currency's intraday high is 82.83.
Inflows will "broadly support" the rupee until "this month is over", a foreign exchange trader said.
"On the other side, you have the RBI (Reserve Bank of India) and the dollar that is on the up move."
The RBI has been intervening to limit the rupee's decline in the face of dollar inflows, buying the greenback via public sector banks.
The banks "are again" on the bid on the dollar/rupee, though "not sure if it is for the RBI or importers", said an FX salesperson at a private bank.
Other Asian currencies were mostly weaker, awaiting two key outcomes this week. The Bank of Japan policy decision is due on Tuesday and the U.S. Federal Reserve review would be a day later.
The BOJ is expected to exit its negative interest rate policy, the Nikkei newspaper reported on Saturday. The odds of an exit versus no change are nearly 50:50.
The Fed, meanwhile, is nearly certain to make no changes to the policy rate and the main focus will the interest rate and inflation projections.
The U.S. central bank's dot plot in December indicated three rate cuts in 2024, which investor are debating whether the latest will show only two.
"Our assessment is that inflation is still in line with the Fed's projections and we see no compelling reason at this stage to alter current guidance," ANZ Bank said in a note.
"However, the risk of an adjustment to the dot plot needs to be highlighted."
(Reporting by Nimesh Vora; Editing by Sohini Goswami)
By Nimesh Vora
