India's rupee hit a near six-week-low against the dollar on Monday but trimmed some losses amid reports that the central bank had intervened in the foreign exchange market to curb volatility, traders said.
The central Reserve Bank of India was believed to have stepped in to the market as the Indian currency intraday edged towards 50 rupees against the dollar, a level last seen on January 25 this year.
"The RBI is suspected to have intervened, selling dollars," an analyst at an investment bank told AFP, speaking on condition of anonymity.
The rupee ended Monday at 49.7, retracing from a day's low of 49.94.
The RBI as a policy does not comment on rupee movements or confirm forex market interventions. It intervenes only to prevent sharp rupee volatility.
The rupee -- Asia's worst performing currency in 2011 -- hit a record-low of 54.3 against the dollar mid-December, sliding 20 percent against the dollar on rising eurozone debt crisis concerns and weak domestic economic data.
The Indian currency has been volatile since then.
From its December levels, it recovered to 48.67 levels in February, led by strong foreign fund buying into Indian equities and debt.
It has then weakened again as demand for the dollar improved from importers due to firm crude oil prices and a fall in local Indian share prices.
On Monday, the Bombay Stock Exchange's benchmark 30-share Sensex index fell 1.55 percent to close at 17,362.87, an over one-month-low.
Analysts expect the rupee to weaken from current levels and say it may hit 51 levels by March-end.