The Indian rupee fell to an over-two-month low on Friday, extending its losing streak to a third week, as investors remained cautious on risk assets ahead of a key euro group meeting and worries over the US 'fiscal cliff'. The unit fell 0.75 percent for the week, in which the country's twin deficits again came to the fore with a string of disappointing macroeconomic data.
Investors expect the rupee to closely track global developments next week with euro group ministers slated to meet on Tuesday to forge a deal on Greece. "I do not think that rupee will weaken beyond 55.50 to the dollar this year. Otherwise the RBI will use its firepower," said Satyajit Kanjilal, chief executive at Forexserve. Still, the rupee fell to 55.2050 to the dollar in the session, a level last seen on September 13, a day before the government announced key reforms in aviation and multi-brand retail.
The partially convertible rupee ended weaker at 55.1650/1750 to a dollar as against its previous close of 54.70/71. In the offshore non-deliverable forwards segment, the one-month contract was at 55.50 while the three-month was at 56.07. In the currency futures market, the most traded near-month dollar/rupee on the National Stock Exchange and the MCX-SX closed around 55.3275 with total traded volume of $4.5 billion.