The Indian rupee ended slightly weaker on Tuesday as dollar demand from local corporates pressured the currency even as the greenback slipped, which helped lift most Asian currencies.

The rupee closed at 83.1775 against the US dollar, compared with its previous close at 83.13.

The dollar index slipped below the 104.5 mark, extending its losses from Monday, while most Asian currencies ticked up, with the Korean won up 0.4 per cent and leading gains.

Dollar demand from importers weighed on the rupee but with a broader bias tilted towards appreciation in the currency, the losses were largely contained, a foreign exchange salesperson at a private bank said.

Traders expect the rupee to hover between the 82.90 and 83.30 range, heading into the outcome of India's national elections on June 4. "The performance of Indian equities is expected to be a significant driver for the rupee, especially as investors position themselves ahead of the national election (results)," said Amit Pabari, managing director at FX advisory firm CR Forex.

Benchmark Indian equity indices the BSE Sensex and Nifty 50 ended down 0.3 per cent and 0.2 per cent, respectively, on Tuesday after touching record highs in the previous session.

Foreign investors have net sold about $2.7 billion of Indian equities in May so far.

Inflows of over $2 billion related to the rejig of the MSCI Global Standard Index are expected later this week, according to an estimate by Nuvama Alternative & Quantitative Research.

Meanwhile, dollar rupee forward premiums inched up with the 1-year implied yield up 1 basis point to 1.66 per cent.

The focus this week will be on the release of the US personal consumption expenditure (PCE) data due on Friday. Economists polled by Reuters expect that core PCE prices, the Federal Reserve's preferred inflation gauge, rose 0.3 per cent month-on-month in April.

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