The rupee ended at 83.5425 against the U.S. dollar, almost unchanged from its previous close at 83.5450. The currency remained in a tight band between 83.5225 and 83.55 during the session.
State-run banks were spotted offering dollars through the day's session, likely on behalf of the RBI, but they "were holding the level" instead of pushing the rupee towards appreciation, a foreign exchange trader at a private bank said.
"Hard to say which way the price action will tilt but would prefer buying on dips (on the dollar-rupee pair)."
Routine interventions from the RBI have helped the rupee avert a fall to its all-time low of 83.5750 hit in April.
The dollar index was up 0.1% at 104.8, while most Asian currencies also inched up after a softer-than-expected U.S. inflation reading boosted hopes of an interest rate cut by the Federal Reserve in September.
The improved odds pushed U.S. bond yields and the dollar lower even as Fed policymakers' interest rate projections turned more hawkish with only one rate cut expected over 2024, down from three pencilled in earlier in March.
Dollar-rupee forward premiums slipped, pressured by the hawkish tilt in interest rate projections with the 1-year implied yield down 1 basis point at 1.60%.
Given the dot plot, "expect receiving bias only in far forward premiums now", a second foreign exchange trader at a private bank said.
Broadly, the rupee is "forecast to oscillate within a range of 82.90 to 83.70", Amit Pabari, managing director of foreign exchange advisory firm CR Forex, said.
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