Rupee forwards were active, with two-week forwards ending at 152.55/65 per dollar, compared with Tuesday's close of 152.70/80.

"There was some selling by a foreign bank. We have seen some inward remittances ahead of the festive season and seasonal (importer) demand has largely covered. Besides, state bank's demand for dollar was also there," said a currency dealer, requesting anonymity.

The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional new year in April, dealers said.

The central bank on Monday raised the spot rupee reference rate by 10 cents to 151.70 after the bank raised the it by 25 cents on March 20.

On Friday, the central bank raised interest rates for the first time in eight months, saying tighter policy was a precaution against a build-up of inflationary pressures.

Analysts said the rate hike, a move aimed at easing pressure on the rupee, could help stabilise the domestic currency that is hurt by rising imports and outflows due to rupee bond sales by foreign investors.

Foreign investors net bought government securities worth 70 million rupees ($461,285) in the week ended March 22. They have net sold 63.2 billion rupees of such instruments so far this year.