On Thursday, rupee had settled 21 paise higher at 71.03 against dollar.The rupee on Friday weakened by 16 paise to close at 71.19 against US dollar amid rise in demand for greenback from exporters and unabated increase in global crude oil prices.
This is second successive week of loss for Indian currency.
During week domestic unit registered a loss of 27 paise.
In previous week, local unit had slumped by 81 paise.
Forex traders said foreign fund outflows, gain in domestic equity market and stronger dollar against its key rival currencies impacted rupee trading pattern.At Interbank Foreign Exchange (forex) market, rupee opened lower at 71.12 and fell further to touch day's low of 71.24.
The domestic currency, however, pared some losses and finally ended at 71.19 per dollar, down by 16 paise against its previous close.On Thursday, rupee had settled 21 paise higher at 71.03 against dollar."Along with rupee, benchmark government bonds also dropped, as fiscal worries have continued to weigh on markets with Finance Minister Arun Jaitley hinting of a possible 'people friendly' budget ahead of general election," said VK Sharma, head PCG capital markets strategy, HDFC Securities.Domestic equity market closed marginally higher Friday.
The BSE Sensex settled 12.53 points, or 0.03 per cent, higher at 36,386.61.
The broader NSE Nifty inched up 1.75 points, or 0.02 per cent, to 10,906.95.Meanwhile, dollar index, which gauges greenback's strength against a basket of six currencies, was trading lower by 0.04 per cent at 96.02."ICE dollar index steadied during day but was set for its first weekly rise in five weeks as doubts grew on ability of other major global central banks such as European Central Bank to start raising interest rates this year," Mr Sharma said.Brent crude, global benchmark, was trading at $61.90 per barrel, higher by 1.18 per cent.On a net basis, foreign portfolio investors (FPIs) purchased shares worth Rs 842.13 crore Thursday, while domestic institutional investors (DIIs) were net sellers to tune of Rs 727.46 crore, provisional data available with NSE showed.The Financial Benchmark India Private Ltd (FBIL) set reference rate for rupee/dollar at 71.1418 and for rupee/euro at 81.0656.
The reference rate for rupee/British pound was fixed at 92.2946 and for rupee/100 Japanese yen at 65.04.