"The recent INR upmove appears to be overdone. Let us come back to basics and fundamentals," the chief of dealing at a private bank said.
Foreign funds bought Indian cash shares of $64.82 million on Tuesday.
The dollar wobbled near a six-week low against a basket of currencies on Wednesday, hampered by a growing view that the Federal Reserve needs more positive economic data before it decides to start reducing its monetary stimulus.
Almost all Asian currencies trading stronger compared with the dollar.