The domestic currency has already dropped 44 paise, or 0.67 per cent, in the previous two sessions.
The domestic currency had last touched 65-level and ended at 65.24 on September 6, 2013. It moved in a range of 64.63 and 65.23 during the day.
The RBI stipulated on Thursday that foreign institutional investors would require a mandate from participatory note holders to hedge on their behalf.
Increased demand for the dollar from importers affected the value of the rupee
Petrol price has been hiked by Rs 1.82 a litre, excluding taxes, with effect from midnight tonight.
However, FII outflows of Rs 545 crore (Rs 5.45 billion) capped the gains in the rupee, which had slumped by 126 paise in past two days.
Forex dealers said besides the dollar's gains against the euro overseas, increased demand from importers for the US currency and a lower opening in the domestic equity market also put pressure on the rupee.
The local currency had lost 119 paise in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
The rupee has dropped by 21 paise or 0.32 per cent in the last two sessions.
Forex dealers said dollar's weakness against other currencies overseas supported the rupee.
Continuing its range-bound movement for the fourth session, the rupee today closed up by two paise at 59.25 ahead of industrial output and retail inflation data.
The domestic currency has gained 9 paise or 0.13 per cent in two days.
The dollar's weakness against some currencies overseas limited the rupee's fall.
The rupee slipped from its initial gains by 5 paise against the US currency to 67.89 in late morning deals on bouts of dollar demand from importers.
The rupee had dropped by 60 paise or 0.89 per cent in previous three trading days.
Weakness of the dollar in the overseas market also boosted the rupee, a forex dealer said.
The rupee continued to rule firm against the dollar for the second consecutive day.
The rupee snapped its two-day winning run against the dollar.
Extending losses for the second straight day, the rupee declined by 11 paise to close at more than 3-week low of 66.93 against the US dollar.
Rupee down 13 paise to 66.72 against dollar
The rupee had gained nine paise to close at nearly one- month high of 61.84 against the dollar in yesterday's trade after the government said in the interim Budget that fiscal deficit this financial year will be capped below target.
Falling for the first time in three days, the rupee today erased initial gains to end 15 paise lower at 62.43 against dollar on fag-end demand of the US currency from banks and importers, amid a tepid stock market.
Fag-end selling of dollars by banks and exporters
Fresh selling of dollars by banks and exporters on the back of good foreign capital inflows helped the rupee
Falling for the second day, the rupee on Friday weakened by 12 paise against dollar to end at 62.68 weighed down by demand for the American currency from importers and data showing fiscal deficit crossed 95 per cent of the annual target during April-December.
The rupee had firmed up 16 paise to close at 67.52 on Thursday.
The rupee fell to more than one-month low of 65.75 against the US dollar on Thursday.
Bucking a strong trend in share market, the Indian rupee on Monday gave up all its initial gains and slipped 18 paise to close at 61.94 against the Greenback on rising dollar demand from importers.
The trading range for the Spot USD/INR pair is expected to be within 66.20 to 67.00.
The rupee showed range-bound movement on Wednesday as investors preferred to stay cautious in the unsure market.
The rupee continued to slide against the pound sterling and finished at 102.64 as against 102.25 previously.
Recovery in the equity market also boosted the rupee value against the dollar, a forex dealer said
The domestic unit moved in a range of 64.14 and 63.99.
In forward market, premium for dollar continued to fall due to persistent receivings from exporters.
The Reserve Bank of India (RBI) will have to take far more pro-active steps to rebuild forex reserves, because if the status quo remains, rupee could touch 75 per US dollar by the end of 2014, Bank of America Merrill Lynch said in a report.
Amid sustained weakness across categories, the Indian stock market remained below the trillion-dollar mark for the third consecutive day today, as the total valuation of all listed companies slipped further to $944 billion.
Rupee movement, global cues key for stocks this week: Experts
The rupee had jumped by 164 paise or 2.39 per cent in previous six trading days.
A sustained rise in equity market also boosted the rupee sentiment.
After another day of volatile trade, the rupee today appreciated by seven paise to close at a new one-month high of 59.04 against the dollar as the RBI's liquidity-tightening measures continued to lend support.
