The Indian rupee gained on Friday, recovering from its nine-month low hit in the previous session as sentiment improved after China cut interest rates and as domestic shares soared to record highs ahead of the start of the winter session of parliament. Still, the rupee fell 0.1 percent against the dollar this week, its fourth consecutive fall, on the back of a global rally in the greenback.
Sentiment improved somewhat on Friday after China unexpectedly cut benchmark interest rates, stepping up a campaign to prop up economic growth in the world's second-largest economy. Traders also cited hopes the government would push through reforms in the winter session of parliament due to start on Monday, which helped push domestic indexes to record highs.
But, analysts do not expect wide moves in the rupee next week. "I expect the rupee to be in rangebound trade," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with Andhra Bank, who expects the local currency to trade in a range of 61.60/62.20 next week. The partially convertible rupee closed at 61.7625/7725 per dollar versus its previous close of 61.94/95. On Thursday, it had touched a low of 62.22, its weakest level since February 20.
Intraday, there was some dollar demand from state-owned banks as India is soon due to pay a third tranche of $400 million to Iran ahead of a November 24 deadline to an interim deal with six world powers that allows Tehran to recover part of its overseas frozen oil revenues. In the offshore non-deliverable forwards, the one-month contract was at 61.98/62.08, while the three-month was at 62.52/62.
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