The rupee was seen trading at 54.28/29 in afternoon deals on Monday against its previous close at 54.02/03, tracking losses in the domestic equity market and a broad risk-off globally.
Asian stocks and commodities fell sharply on Monday as investors were rattled by a radical bailout plan for Cyprus and piled into safer assets including the US dollar, gold and sovereign debt.
The Sensex was down 0.8 per cent.
Most Asian currencies were trading weaker compared with the dollar.
The pair is expected to hold in a 54.10 to 54.40 range ahead of RBI's policy review on Tuesday, where it is widely expected to cut rates by at least 25 basis points (0.25%), traders said.
