Traders said higher payments for oil imports could be partly cushioned by remittances and inflows from corporate borrowings before the financial ends on March 31.

At 11:04 a.m. (0534 GMT), the partially convertible rupee was at 44.9450/9500 per dollar, little changed from Tuesday's close of 44.9550/9650.

"There is a strong demand for dollars today from oil importers, but nothing really negative has happened for the rupee to weaken much," said a dealer at a foreign bank.

The rupee traded between 44.9450 and 45.0250, and should move in a narrow 44.90-45.10 range through the day, traders said.

Oil is India's biggest import and refiners are the main buyers of dollars in the local forex market.

Brent crude rose as much as 0.6 percent on Wednesday, consolidating gains above $116, as an intensifying unrest in Yemen highlighted the security risks facing oil output from the Arabian peninsula, home to the world's biggest oil fields.

The euro slipped, retreating from a 4 1/2-month high against the dollar, as worries about debt problems in Portugal and Ireland sapped appetite for the currency and its near-term outlook is seen hinging on whether Lisbon's make-or-break attempt to garner parliamentary support for its austerity measures will succeed.

The index of the dollar against six major currencies was up 0.13 percent at 75.529.

Indian shares , which have been amongst the worst performers this year, rose 1 percent on bargain hunting by investors after a weak opening.

Foreign funds have sold about $1.9 billion of stocks this year, after buying a record $29.3 billion in 2010.

The one-month onshore forward premium was at 30 points, lower than Tuesday's close of 30.50, while the three-month premium was at 85 points versus 82.25 and the one-year was at 292.25 points from previous 291.

The one-month offshore non-deliverable forward contracts were quoted at 45.23, weaker than the onshore spot rate.

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 were all at 45.0025, with the total volume at about $1.8 billion.