The rupee today recovered all of its early losses and edged up two paise to end at 63.48 against the dollar as exporters sold the US currency.
The rupee opened weaker at 63.75 on the interbank foreign exchange market from the previous close of 63.50 and dropped further to 64.18 on dollar demand from banks and a firm US currency in the overseas market.
However, it recovered to 63.35 per dollar before ending at 63.48, a marginal gain of two paise. The rupee ended higher for the second consecutive week.
The Prime Minister's key adviser today said the Reserve Bank of India's tight monetary policy should continue until the rupee stabilises.
The Prime Minister's Economic Advisory Council also slashed the growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier.
The 30-share S&P BSE Sensex fell 49.12 points or 0.25 per cent as concerns over growth outweighed positive economic data that showed a 2.6 rise in industrial production in July and consumer price inflation easing to 9.52 per cent in August.
Foreign institutional investors sold a net Rs 98 crore of shares today after buying Rs 930.54 crore of stocks yesterday, as per provisional data with the stock exchanges.
The dollar index traded up 0.12 per cent against six major global rivals ahead of US retail sales data before the Federal Reserve meeting next week.
Not much action was seen in the market, said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). The trading range for the spot USD-INR pair is expected to be within 62.80 to 64.20, he said.
Forward dollar premiums ended higher on paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in February ended higher at 258-263 paise as against the previous closing level of 256-261 paise, while far-forward contracts maturing in August moved up to 461-466 paise from 459-464 paise.
The RBI fixed the reference rate for the dollar at 63.7890 and for the euro at 84.6675.
The rupee recovered against the pound sterling, euro and yen. It moved up to 100.32 against the pound from 100.34