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The weakness in the rupee is expected to continue this week after a short recovery seen on Friday. The key reason for the weakness was foreign investors might continue to sell off their investments in domestic markets which is likely to put pressure on the rupee.
On Friday, the rupee had gained after five consecutive sessions of losses. "The rupee is likely to trade in the range of 63.50 to 64.60 to a dollar and the bias is more towards depreciation. The weakness will still persist and the global environment is not very conducive," said Anindya Banerjee, currency analyst, Kotak Securities.
On Friday, the rupee ended at 63.94 to a dollar, compared with the previous close of 64.24. The appreciation in the rupee on Friday was due to dollar sale by exporters.
The foreign exchange reserves grew by a nearly $7.3 billion for the week ended May 1 and touched all-time high, latest data released by Reserve Bank of India showed.
"The central bank had been sterilising the dollar inflows due to which reserves had gone up. But this week that trend has taken a total 180 degree shift," said the head of treasury of a large public sector bank.
Taking Friday's close into account since the start of 2015, the rupee has already weakened by 1.43 per cent. The rupee had ended at 63.04 on December 31, 2014.
