MUMBAI : At the interbank foreign exchange market, the rupee opened at 91.89 and briefly strengthened to 91.82 during early trade. However, persistent dollar demand dragged the currency to its weakest-ever level of 92.02. It later settled at 91.97, posting a marginal gain of just 2 paise from the previous close.

On Thursday, the rupee had ended flat at 91.99, which was then its lowest closing level. The currency had earlier touched the 92-per-dollar mark on January 23, before slipping past it on Friday.

Forex traders said sustained foreign institutional investor (FII) outflows and weakness in domestic equities weighed on sentiment. “The Indian rupee recovered from all-time lows on an overnight decline in crude oil and commodity prices. However, recovery in the US dollar index and FII outflows capped sharp gains,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan. He added that the dollar index strengthened after Donald Trump said he would announce his nominee to head the US Federal Reserve.

The dollar index, which measures the greenback against a basket of six major currencies, was trading 0.45 per cent higher at 96.57. Brent crude, the global oil benchmark, declined 0.96 per cent to USD 70.03 per barrel in futures trade.

Domestic equity markets also closed in the red, with the Sensex falling 296.59 points, or 0.36 per cent, to 82,269.78, while the Nifty slipped 98.25 points, or 0.39 per cent, to 25,320.65. Exchange data showed that foreign institutional investors sold equities worth Rs 393.97 crore on Thursday.

Meanwhile, the Economic Survey tabled in Parliament noted that the rupee is “punching below its weight” and said “investor reluctance to commit funds to India warrants examination at a time when inflation is under control and the growth outlook is favourable.”