The Indian rupee weakened against the dollar on Tuesday following gains in the US currency and a fall in Mumbai shares, which led to concerns foreign investors would pull out more funds.
The partially convertible rupee ended at 45.91/93 per dollar, down 0.3 percent from Monday's 45.77/78. The rupee touched a three-year low of 46.57 last week as foreign funds pared investments in emerging markets.
"Demand for dollars came primarily from a foreign bank, presumably on behalf of a large customer. The sentiment was down because of falling share prices, but we saw good dollar selling by custodial banks," a foreign exchange broker said.
The dollar gained ground against the euro and yen after Federal Reserve Chairman Ben Bernanke pledged on Monday to stay vigilant on inflation, leading to speculation about an increase in US interest rates in June.
The euro weakened to around $1.2833 from Monday's $1.2979.
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