The rupee today lost 12 paise to close at near one-week low of 67.18 a dollar due to strong demand for the US currency amid expectations of rate hike by the US Federal Reserve before the end of the year.
A smart rebound in the stock market and sustained capital inflows, however, restricted the rupee loss.
India will not be immune from the impact of the potential September rate hike, but is better placed than most of its rivals at this juncture, a forex dealer said.
Federal Reserve chair Janet Yellen in her speech at the annual Jackson Hole conclave last week hinted at a second interest rate-hike sooner rather than later against the backdrop of continued solid performance of the US labour market and economic activity.
In global trade, the dollar maintained its bullish momentum against major trading counterparts. In early trade, the US dollar index was up 0.27 per cent at a fresh two-week high of 95.76 against a basket of six major currencies.
The rupee today resumed substantially lower at 67.14 compared to previous close of 67.06 at the Interbank Foreign Exchange (forex) market on fresh bouts of dollar demand.
It kept descending, weighed down by early fall in local equities and strengthening dollar value to hit an intra-day low of 67.22, before ending at 67.18, revealing a loss of 12 paise, or 0.18 per cent.