MUMBAI: The Indian rupee inched higher to the dollar on Friday, while logging its sixth straight weekly decline in the wake of a sustained surge in Treasury yields.

The rupee ended at 82.6750 on Friday, compared with 82.7600 in the previous session. For the week, the rupee was down 0.4%. Over the last six weeks, the local unit has dropped about 4%.

The rupee’s losses this week would have been more had it not been for the Reserve Bank of India’s intervention. The RBI had on Thursday intervened aggressively when rupee dropped to a record low of 83.29.

The intervention was on a forward basis and not on spot basis as has been the case recently, according to traders. The RBI sold dollar in spot and did buy/sell swaps mostly for December delivery.

The buy/sell swaps, alongside rising Treasury yields and stop losses on paid positions prompted rupee forward premiums to extend their recent slide. The 1-year USD/INR implied yields dropped below 2.25%, down 30 basis points on-week.

In the previous week, the 1-year yields had dropped 40 bps. Market participants reckon RBI’s preference to sell dollars for delivery at a future data rather than on spot basis may be fuelled by the need to manage rupee liquidity and avoid decline in headline foreign exchange reserves.

More losses were likely for the rupee in the coming weeks after which there could be a possible reversal, some analysts said.

“We expect rupee to drop to 84 levels, but may see reversal from that point,” Sugandha Sachdeva, vice president of commodity and currency research at Religare Broking, said.