The currency fell 0.7 per cent in April after having hit an eight-month high of 59.5950 on April 2, as a rally in domestic shares stalled as India embarked on a five-week election process set to conclude next month.
Until the outcome of elections on May 16, traders expect global factors and foreign flows to largely drive direction for the rupee. A key event will be the monetary stimulus withdrawal currently being undertaken by the U.S. Federal Reserve, which is set to conclude its two-day meeting on Wednesday.
If the Fed sticks to paring stimulus by $10 billion as expected, and if there is no indication of interest rate hikes, then we may see little impact on the rupee.The rupee should hold at 60 per dollar for the time being.
The partially convertible rupee closed at 60.31/32 per dollar compared with 60.42/43 on Tuesday.
A large state-owned bank was said to have sold dollars aggressively on behalf of a foreign client, which briefly lifted the rupee to a more than one-week high of 60.2650, a level last seen on April 21.
The broader NSE index fell 0.28 per cent after earlier hitting its lowest level since April 7 as the market dropped in a bout of profit-taking.
In the offshore non-deliverable forwards, the one-month contract was at 60.68 while the three-month was at 61.42.