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The rupee fell and bonds yields surged on Friday after retail inflation spiked, raising bets of a rate hike at the RBI's policy meeting next week.
The rupee fell to as much as 62.18 to a dollar and was last trading at 62.14/15. It had last closed at 61.81/82.
Bond yields surged as traders factored in the prospect of the third rate hike by Reserve Bank of India governor Raghuram Rajan.
The 10-year bond yield was up 7 basis points at 8.92%.
Sharply higher food prices drove up retail inflation to 11.24% in November from 10.17% in October, data released Thursday showed.
