Moving in line with equity market, the Indian rupee washed out earlier gains against the US currency and was quoted 9 paise down at 61.64 on fresh dollar demand from banks and importers due to lower dollar in overseas.
The rupee gained higher value at 61.35 per dollar as against the last closing level of 61.55 per dollar at the Interbank Foreign Exchange (Forex) Market and moved up further to 61.31 on selling of dollars by banks on the back of sustained capital inflows into equity market.
However, it washed out initial gains and was quoted down at 61.64 per dollar at 1045hrs.
It moved in a range of 61.31 per dollar and 61.69 per dollar during the morning deals.
In New York market, the dollar edged down against some rivals yesterday as the US approached its debt limit with congressional leaders trying to work out a deal on the Capitol Hill.
Meanwhile, the Indian benchmark Sensex dropped by 91 points or 0.44 per cent to 20,516.63 at 1050 hrs.