The rupee opened lower at Rs 66.45 as against the overnight closing level of Rs 66.39 at the Interbank Foreign Exchange market and moved down further to Rs 66.46 on initial month-end dollar demand from importers.
Marking the fifth consecutive year of depreciation, the rupee ended 2015 with a yearly loss of 312 paise, or 4.95%, against the US dollar on heavy fund outflows, even as the last day on Thursday saw a modest gain of 24 paise in the Indian currency.
The rupee closed 24 paise higher at Rs 66.15 against the US dollar on Thursday on hopes of foreign capital inflows amidst recovery in the equity market.
The domestic currency opened lower at Rs 66.45 as against the overnight closing level of Rs 66.39 at the Interbank Foreign Exchange market and moved down further to Rs 66.46 on initial month-end dollar demand from importers.
However, it recovered immediately to Rs 66.09 on fresh selling of dollars by banks and exporters before closing at Rs 66.15 on hopes of foreign capital inflows, showing a gain of 24 paise, or 0.36%. It moved in a range of Rs 66.09 and 66.46 during the day.
The dollar index was up by 0.09% against the basket of six currencies in late afternoon trade.
Globally, the US dollar was mostly flat against its major peers as the holiday season capped the damage after Wednesday's surge of the greenback against commodity currencies, including the Russian rouble.
Meanwhile, the benchmark BSE Sensex on Thursday rose by 157.51 points, or 0.61%, to end 2015 at 26,117.54.
In the forward market on Thursday, the premium for the dollar fell further on sustained receivings from exporters.
The benchmark six-month premium payable in May eased to 170-172 paise from 170.75-172.75 paise previously and far forward November 2016 contract also moved down to 379-381 paise from 380-382 paise.
The Reserve Bank of India (RBI) fixed the reference rate for the dollar at 66.3260 and for the euro at 72.5010.
In cross-currency trades, the rupee strengthened against the pound sterling to close at Rs 98.04 from Wednesday's level of 98.38 and gained against the euro to close at Rs 72.10 from 72.52 earlier.
The local unit rose against the Japanese Yen to Rs 54.96 from Rs 55.11 previously.
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