The rupee ended little changed on Monday after gaining in each of the previous four sessions as investors turned more cautious a day before a preliminary survey on China's manufacturing sector.
Worries about the health of China's economy have been a major drag in emerging market assets over the past week, while uncertainty also remains about the US Federal Reserve's near-zero interest rate policy.
Meanwhile, the rupee is also likely to remain range-bound ahead of the Reserve Bank of India's policy review on September 30.
Although the RBI is widely expected to keep interest rates unchanged, markets will focus on the tone of its statement.
"Rupee should be range-bound, given that we are seeing inflows and state-owned banks are buying (dollars)
Raina expects the rupee in a 60.50 to 61.50 range in the near term.
The partially convertible rupee ended at 60.8150/8250 per dollar, compared with its close of 60.81/82 on Friday.
Dollar sales by custodians were offset by greenback purchases by public sector banks, keeping the rupee in a range, according to traders.
Traders said foreign fund flows will also be a key for the rupee ahead of the Reserve Bank of India's policy review.
Foreign funds have bought debt and equity worth nearly $3.62 billion so far in September, as per regulatory data, bringing their total for the year to $33.65 billion.
In the offshore non-deliverable forwards, the one-month contract was at 61.13/18 while the three-month contract was at 61.66/76.
