MUMBAI: The Indian rupee marked its worst week in five on Friday, as risk sentiment was hit by the Chinese yuan weakening past 7 per dollar to breach a key psychological level for the first time in two years.

The partially convertible rupee closed down 0.1% at 79.74 per dollar, recouping some of the day’s losses when it had hit an over one-week low. For the week, the rupee declined 0.2%, its biggest loss since the week ended Aug 12.

A foreign exchange trader said market participants were wary that the rupee had not been allowed to weaken past 80 per dollar and saw it as a level to protect.

Traders were likely unwinding long dollar positions and creating fresh shorts, he added.

Asia’s economic engine China saw its yuan fall to 7.0166 due to a buoyant dollar and a slowing domestic economy, which had a cascading effect on its regional peers due to their close trade relationship.

A slew of data from China came in mixed, as industrial output beat forecasts but property investment continued to decline considerably.