The Indian rupee hit a three-week low on Friday, extending its fall for a third straight week, as uncertainty over the US "fiscal cliff" resolution dented demand for risk assets including domestic equities. "INR has been choppy and I expect it to remain so in the last week as well. The US fiscal agreement will be important for the market," said Paresh Nayar, head of fixed income and forex trading at First Rand Bank.

The partially convertible rupee closed at 55.06/07 per dollar versus its previous close of 54.8450/8550. The unit fell to a low of 55.2550, its weakest since November 29. On the week, the rupee shed 1 percent of its value, marking its third consecutive weekly fall.

In the offshore non-deliverable forward market, the one-month contract was at 55.43 while the three-month was at 55.95. In the currency futures market, the most-traded near-term dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange closed at around 55.1975 with a total traded volume of $5.38 billion.

Copyright Reuters, 2012