Rupee washed out its initial gains and was quoted lower by 7 paise to 66.96 against the American currency in the late morning deals on fresh dollar demand from banks and importers amid reports that the Commerce Ministry might propose devaluation of the rupee to boost exports.
The domestic currency resumed higher at 66.88 per dollar as against the closing level of 66.89 per dollar the Interbank Foreign Exchange (Forex) Market and firmed up further to 66.82 per dollar on initial dollar selling from banks and exporters on the back of lower dollar in the overseas market.
There were reports today that the Commerce Ministry, headed by Nirmala Sitharaman, is working on a strategy, which included proposing devaluation of the rupee to give a boost to sagging goods and services exports.
It washed out initial gains and dropped to 67.0750 per dollar on fresh dollar demand before quoting at 66.96 per dollar at 1100 hrs.
It hovered in a range of 66.82 per dollar and 67.0750 per dollar during the morning trade.
Foreign portfolio investors (FPIs) sold shares worth Rs 477.33 crore yesterday, as per provisional data released by the stock exchanges.
In overseas market, the yen was stronger against its peers during Asia trade with weakness in Tokyo stocks prompting investors to buy the perceived safety of Japanese currency.
With investors remaining cautious before the Federal Reserve and the Bank of Japan policy setting meetings next week, Tokyo stocks were lower with the benchmark Nikkei Stock falling 1.2 per cent in afternoon deals.