MUMBAI The rupee fell on Monday as gold and crude oil importers bought dollars to meet payment obligations, with dealers also citing outflows related to a gas utility.
Some dealers pegged the dollar outflows related to the gas utility at $150-$200 million.
The currency had hit a six-week high last week as a continued slump in global crude oil and gold prices raised hopes that India will be able to bridge its current account gap.
Lower commodity prices will also help ease inflation and help the central bank to cut rates at its May 3 review.
A Reuters poll released on Monday showed the Reserve Bank of India (RBI) is likely to cut the repo rate by 25 basis points next month, its third such cut this year.
Finance Minister P. Chidambaram said on Wednesday he expected the country's current account deficit for the 2012/13 fiscal year ended March to be around 5 percent of gross domestic product and perhaps half that amount in one to two years.
The partially convertible rupee closed at 54.14/15 per dollar, weaker than its close of 53.96/97 on Thursday. The pair moved in a range of 53.92 to 54.2450 during the session.
Markets were shut on Friday.
Technical charts showed the rupee had an immediate support at the 54.30-35 range, around its previous resistance level of 54.34 on April 12.
"There is heavy demand from gold importers after prices fell. The bias is towards rupee appreciation, but there seems to be a lot of dollar demand at current levels," said Sudarshan Bhat, head of forex trading at Corporation Bank.
He expects the rupee to trade in a band of 53.50-54.50 for the week.
Gold traders in India, the world's biggest buyer of the metal, continued to pick up bargains for a second consecutive week fearing further price rise, after prices rose nearly 1 percent from the lowest level in more than 18 months.
An 11 percent slump in gold prices since last week released years of pent-up demand, resulting in a supply shortage in the physical market, triggering higher premiums.
The rupee's losses were also kept in check by gains in local stocks which closed at their highest level in a month.
In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.1150 with a total traded volume of $5.5 billion.
(Editing by Subhranshu Sahu)