The rupee dropped to a low of 42.87 against the dollar on Thursday, then subsequently recovered to 42.72 on Friday as chances of BJP's survival brightened up with some regional parties announcing their support to the government. "The stage is set for a further round of weakness in the rupee. It is reasonable to expect the rupee in the 42.90 to 43 range on Monday.

Either the Reserve Bank of India or the State Bank of India, have to extend support to the rupee," Mecklai Financial Services senior vice-president KN Dey said.

Kanji Pitamber & Co's Gautam Ashra categorical said, "The first half hour of trading will hold the key. Inter-bank along with heavycorporate interest for dollars will drive the rupee down." The six-month annualised forward cover is seen at 7.20 per cent levels on Monday.

On Friday, the rupee had rallied to close at 42.72/74 from its overnight quote at 42.81.

In the forwards, the six-month annualised forward cover had finished at 6.7 per cent from 7.15 per cent. The rupee's gain in the spot and forwards on Friday was driven on renewed hopes that the Bhartiya Janata Party-led coalition government may scrape through a vote of confidence motion following assurances of support by the Lok Dal.

"The rupee may not go into a free fall. The weakness will largely be an intra-day affair, and there could be a smart recovery by close. The Reserve Bank, in particular may not like to have a volatile situation, especially on the eve of its credit policy," a dealer with a European bank said. "With the Government having lost the vote of confidence, the forex market is expected to be under pressure this week," investment bank I-Sec said.

"The roleof the central bank would be significant in this context," it added.