The rupee depreciated 7 paise to close at 73.61 (provisional) against the US dollar on Friday even as the domestic equity market was trading with significant gains.
The dollar index, which gauges the greenback's strength against a basket of six currencies, strengthened by 0.19 per cent to 92.78.
The local unit opened at 73.38 against the US dollar at the interbank forex market, then lost ground and touched 73.42, down 7 paise over its previous close.
It further added that "RBI mopping up flows by purchasing dollars in anticipation of fund and portfolio flows could also keep the appreciation bias limited for the domestic unit".
The rupee strengthened by 8 paise to close at 73.16 against the US dollar on Friday after the Reserve Bank of India decided to keep benchmark interest rate unchanged.
At the interbank forex market, the rupee was trading in a narrow range. It opened at 73.29 against the American currency, gained some ground and touched 73.28, up 5 paise from its previous close.
Asian currencies are trading weak against USD. The rupee is likely to trade in an intra-day range of 73.35-73.65, said Abhishek Goenka, Founder and CEO, IFA Global.
At the interbank forex market, the domestic unit opened at 73.17 and gained further ground to touch 73.15, registering a rise of 14 paise over its previous close.