At 10:25 a.m., the partially convertible rupee was at 48.79/80 per dollar, marginally above its previous close of 48.82/83.

"There is good two-way interest which is just holding the rupee in a tight band," a dealer with a foreign bank said.

Indian shares opened 0.4 per cent higher but quickly turned negative as mixed Asian markets and sluggish domestic demand kept investors wary.

The euro held steady against the dollar as investors awaited a rate decision by the European Central Bank, after falling sharply on Wednesday due to a downgrade of Russia's sovereign rating.

The dollar index, a gauge of the US unit's performance against other major's, was up 0.1 per cent.

Traders are also awaiting inflation data due around noon. A sharp drop in inflation could help the rupee rise slightly, dealers said.