The rupee on Monday retreated from one-month high level to close down by 5 paise at 65.02 against the US currency on fresh bouts of dollar demand from importers and corporate amid forex outflows.
The domestic currency had risen to one-month high of 64.85 at the outset on gains in equity markets following easing fears of trade war between the US and China.
However, the home currency struggled to preserve early strong gains and succumbed to fag-end selling pressure.
A follow-through weakness below the key 65-mark further dragged the rupee down to hit a fresh session low of 65.06 in late afternoon deals.
It finally settled the day at 65.02, showing a modest loss of 5 paise, or 0.08 per cent.
According to the provisional exchange data, foreign investors pulled out Rs 1,300 crore from stocks on Monday.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.9287 and for the euro at 79.6870.
In the meantime, country’s foreign exchange reserves hit a life-time high of USD 424.361 billion, largely helped by rise in foreign currency assets, the Reserve Bank said.
Meanwhile, yield on the 10-year government bond rose to 7.23 per cent despite FPI investment hike limits in central government securities.
The RBI hiked the FPI investment limit in government securities (G-Secs) to 5.5 percent in 2018-19 and 6 per cent by the end of the next financial year.