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Extending Asian session losses, the Indian rupee declined to 5-day low of 42.4750 against the US dollar at about 4:45 am Eastern Time Monday. The dollar-rupee pair closed Friday's New York deals at 42.1750.

The Reserve Bank Of India is likely to raise its key lending rate by 25 or 30 basis points at its policy review meeting scheduled on July 29, 2008, reported the media.

Seven out of eleven analysts expect that RBI might raise the repo rate from 8.50% on July 29, to follow on from its policy tightening in June following rise of inflation to two digits the report said today.

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As on July 23, the exchange rate of the rupee was Rs 42.33 per US dollar and at this level, it had depreciated by 5.5 per cent over its level on March 31, 2008.

Over the same period, the rupee depreciated by 5.7 per cent against the Pound Sterling, 5.5 per cent against the Euro and 8.2 per cent against Chinese Yuan, while it appreciated by 1.8 per cent against the Japanese Yen, the review said.

Forward premia increased during Q1 FY 2009, reflecting the rising interest rate differentials on account of higher domestic interest rates and CRR hikes.

The average daily turnover in the foreign exchange market increased to $ 49.1 billion during April-June 2008 from $ 39.2-billion in the year-ago period.

While the inter-bank turnover increased from $ 28.5 billion to $ 35.6 billion, the merchant turnover incrased from $ 10.8 billion to $ 13.6 billion.