The spot rupee, which was traded at 153.70 per dollar, closed at 153.65/72, slightly weaker from Tuesday's close of 153.62/68.

"Importer season has started and this month is crucial," a currency dealer said asking not to be named.

"We expect higher depreciation pressure on the rupee in the first two weeks. The currency could fall to 154.50 per dollar this month due to importer demand."

The rupee has slipped 2.7 percent so far this year.

The currency is expected to weaken on generally higher importer demand ahead of the national budget this month, dealers said.

The island nation has seen 20.25 billion rupees ($131.8 million) of net inflows into equities this year as of Monday's close, and 41.1 billion rupees into government securities as of Oct. 25, official data showed.