Traders said market volumes remain thin and beholden largely to foreign fund flows or to large corporate flows in the run-up to the result of the general elections on May 16.
"Market is thin and being driven primarily by flows and not so much by election-related views.Until the election results we could see the rupee hold in a tight 60.00 to 60.45 range.
The rupee closed at 60.11/12 per dollar compared to its previous close of 60.21/22. The currency rose to as high as 60 to the dollar on Monday, which was its highest since April 9.
Some dollar selling by a large corporate was seen in the second half of the trading session, helping rupee to recover from the session low of 60.23.
There was little impact after the HSBC Services Purchasing Managers' Index compiled by Markit, rose to 48.5 in April from 47.5 in March, but held stubbornly below the 50-mark that divides growth from contraction.
In the offshore non-deliverable forwards, the one-month contract was at 60.48 while the three-month was at 61.23.