The rupee was at 83.2750 against the U.S. dollar at 10:54 a.m. IST, down 83.1775 in the previous session. The local currency had opened at 83.2150, pressed by the rise in U.S. Treasury yields.
"Since yesterday, there has been continuous (dollar) buying," a foreign exchange dealer at a bank said.
"Have been hearing oil companies looking to buy for spot. And then with the month-end here, you have the higher-than-usual demand from importers for cash dollars."
The decline in Indian equities was an added factor for the rupee's struggles, traders said. The Nifty 50 Index was down 0.7%, awaiting the India election results due on Tuesday.
In the lead-up to the exit polls on Saturday and the results on June 4, the rupee has been mostly rangebound, like it has been for a large part of this year.
The Reserve Bank of India has made sure through its regular interventions that the local currency's realised volatility remains low relative to its Asian peers.
Asian currencies were all down on the day, with the 10-year U.S. Treasury yield climbing past 4.50%.
Yields for longer maturity rose more than near-term yields and expectations on Federal Reserve rate cuts were mostly unchanged.
Investors await the U.S. core April personal consumption expenditure (PCE) data due on Friday, which would help them gauge when the Fed will begin cutting borrowing costs.
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