The rupee ended flat on Friday, but extended losses for a second week, as caution set in ahead of an expected interest rate hike by the central bank at its policy review next week.

The Reserve Bank of India is widely expected to raise its key repo rate by 25 basis points on Tuesday - its second consecutive monthly hike - as it tries to tackle rising inflationary pressures, a Reuters poll showed.

However, in a bid to further ease funding costs, the central bank is also expected to further ease the marginal standing facility rate by 25 bps, the poll showed.

An interest rate hike could nonetheless dent sentiment by raising concerns about an economy already growing at its slowest pace in a decade.

"The RBI has various options on the policy. However, a hike in the repo rate will be a dampener for the rupee," said Hari Chandramgethen, chief forex dealer at South Indian Bank.

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