The dollar edged up to 108.990 yen in Asia, which was its strongest level since May 31.
The 10-year government bond yield was at 6.58 per cent in the morning trade.
Foreign institutional investors pulled out Rs 401.99 crore Monday, hitting the rupee sentiment.
The rupee gained against the US dollar on Friday after the presentation of the Union Budget.
The 10-year government bond yield was at 6.59 on Tuesday.
In the previous reporting week, the reserves had surged by USD 4.215 billion to USD 426.42 billion.
On a weekly basis, the Indian currency has gained 61 paise.
Sensex trading 362.28 points higher at 39,545.78 and Nifty down 113.50 points at 11,833.25.
ANZ Research said it was sceptical that the Fed would act from one data point alone.
Rupee on Thursday closed 39 paise up at 68.50 against the greenback.
The central bank has also not swapped dollars for rupees since April.
The rupee had settled at 68.95 against the US dollar Tuesday.
The local currency settled almost flat at 68.95 against the greenback in the previous trading session.
The domestic currency settled at 68.95 against the US dollar, down 1 paisa over its last close.
The dollar was up 0.3 per cent at 108.235 yen after going as high as 108.510.
Rupee had settled higher on Friday, up 4 paise, amidst cautiousness ahead of G-20.
“Today, USDINR pair is expected quote in the range of 69.05 and 69.70,” brokerage firm Motilal Oswal Financial Services said in a report.
Reserve position with the fund also rose by USD 9.6 million to USD 3.354 billion.
The local currency on Wednesday gained 21 paise to close at 69.15 against the greenback.
Rupee settled at 69.15, up 21 paise against its previous close of 69.36.
Exchanges have been provided with the flexibility to design and structure standardised products.
An index of developing-market currencies flirts with the highest level since April.
The dollar index against a basket of currencies stood at 96.176 on Wednesday
Rupee opened the day at 69.32 per dollar, up 3 paise against the previous close of 69.35.
The rupee has depreciated from Rs 60.50 to a dollar in 2013-14 to Rs 69.74 to a dollar in April-December of 2018-19.
After opening on a weak note, rupee recovered and finally settled 23 paise higher at 69.35.
The local currency on Friday slid 14 paise to close at 69.58 against the US dollar.
Today, USDINR pair is expected quote in the range of 69.20 and 69.90.
Rupee rose to a high of 69.35 to the dollar in day trade on the US Federal Reserve's comments.
The local unit on Wednesday inched up 2 paise to end at 69.68 against the US dollar.
The dollar index against a basket of six major currencies was little changed at 97.188.
Against the euro, the dollar was down 0.38% to $1.123 , and against the pound it was down 0.77% to $1.265.
Data showed inflation in May rose 3.05% compared with 2.90% in the previous month.
Hopes of a breakthrough in US-China trade talks and softening crude oil prices supported the local unit.
The local currency on Tuesday closed at 69.69 against the US dollar.
The euro was steady at $1.1198 after shedding 0.2 per cent overnight.
Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service