Traders are also cautious as the Constitution amendment bill to amend goods and services tax (GST) is likely to be listed this week, after finance minister Arun Jaitley meets state finance ministers on Tuesday.
The local currency opened at 67.18 a dollar. At 9.12am, the home currency was trading at 67.19, down 0.15% from its previous close of 67.08.
India’s 10-year bond yield was trading at 7.244%, compared with Friday’s close of 7.251%.
India’s benchmark Sensex index fell 0.18%, or 49.28 points, to 27,753.96. So far this year, it has gained 6.3%.
The US Federal Open Market Committee is due to start a two-day monetary policy meeting on 26 July, with the market expecting the US Federal Reserve to keep monetary policy steady.
So far this year, the rupee is down 1.5%, while foreign institutional investors have bought $3.94 billion in equity and sold $814.5 million in debt markets.
Asian currencies were trading lower. Malaysian ringgit was down 0.52%, Taiwan dollar 0.4%, Indonesian rupiah 0.37%, Japanese yen 0.31%, South Korean won 0.21%, Singapore dollar 0.2%, Philippines peso 0.14% and Thai baht fell 0.07%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.449, down 0.02% from its previous close of 97.467.
Traders will also be eyeing Bank of Japan’s two-day monetary policy meeting due to start on 28 July, with markets expecting additional fiscal and monetary stimulus to jump-start the country’s anemic growth.