Mumbai: The rupee extended its gains for the second day on Monday against the US currency, moving up by 7 paise to close at 66.57 a dollar even as stock markets fell.
Fag-end selling of dollars by banks and exporters in view of persistent foreign capital inflows helped the Indian currency extend gains, dealers said.
The rupee resumed sharply lower at 66.90 per dollar as against last Wednesday's closing level of 66.64 at the Interbank Foreign Exchange (Forex) market here.
However, it recovered afterwards to 66.56 per dollar on fresh selling of dollars by banks and exporters in view of good foreign capital inflows before ending at 66.57 per dollar, showing a gain of 7 paise or 0.11 per cent.
It had gained 7 paise in the last session on Wednesday. Forex markets were closed on Thursday and Friday on account of Holi and Good Friday.
Foreign funds (FPP and FIIs) continued their buying spree as they bought shares worth Rs 976.91 crore on last Wednesday as per the provisional data of stock exchanges.
Also, the dollar index was down 0.02 per cent against a basket of six currencies in the late afternoon trade.
The benchmark BSE Sensex ended lower by 371.16 points or 1.46 per cent to close at 24,966.40.
In forward market, premium for dollar continued to fall due to persistent receivings from exporters.
The benchmark six-month premium for August ended lower 201-203 paise from 202-204 on last Wednesday and far forward February 2017 contract moved down to 404-406 pasie from 406-408 paise.
The Reserve Bank fixed the reference rate for the dollar at 66.6680 and euro at 74.4215.
In cross-currency trades, the rupee firmed up further against the pound sterling to finish at 94.26 from 94.55 on last Wednesday and also moved up further to 74.29 per euro from 74.60.
The rupee hardened against the yen to 58.66 per 100 yens from 59.17 previously.