The Indian rupee seesawed in a narrow range against the dollar on Tuesday before ending little changed, while underlying sentiment remained weak.

The rupee ended at 95.1150 per dollar, up less than 0.1% from 95.1850 on Monday.

Persistent external pressures from higher oil prices and equity outflows have left the currency reliant on Reserve Bank of India intervention for support, traders said.

India should not "fixate on a number" for its currency level or run down foreign exchange reserves to defend the rupee, former Reserve Bank of India governor Raghuram Rajan, told Reuters on Tuesday. The central bank has spent around $80 billion to bolster the local currency since June.

Benchmark Brent crude oil was hovering close to its highest levels in the last six months, around $117 per barrel in Asian hours, pushing importers to increase their hedging bets.

India relies on imports for around 90% of its oil requirements. High prices add to concerns over Asia's third largest economy's outlook, with implications for foreign portfolio outflows and the nation's current account balance.

Foreign investors have net sold around $8.5 billion of Indian equities in the last two months, a major drag on the rupee.

Equity market volatility, currency concerns and the return on offer from dollar-denominated fixed income investments are encouraging investors to reassess equity-concentrated portfolios, said Sachin Sawrikar, Managing Partner at GIFT City-based Artha Bharat Investment Managers.

Meanwhile, traders said elevated US Treasury yields have also been putting pressure on the local currency, as investors are not able to find a decent carry for their investments risks.

Viram Shah, CEO at fintech company Vested, said with the 10-year US yield around 5%, fixed-income instruments have become more relevant for investors.

Traders said the central bank's tolerance for a measured weakening in the rupee would be closely watched in the near-term.

The RBI's intervention, along with measures to curb dollar buying helped the local currency recover earlier this month after it neared a record low hit in May.