MUMBAI: The Indian rupee ended stronger on Friday, aided by inflows spurred by the inclusion of the country’s bonds into the JPMorgan emerging market debt index.

The rupee closed at 83.3825 against the US dollar on Friday, up nearly 0.1% from its close at 83.46 in the previous session.

While large foreign banks were spotted offering dollars, state-run banks’ dollar bids capped the rupee’s gains, traders said.

Eligible Indian bonds are being included into the widely tracked JPMorgan index starting Friday, setting the stage for billions of dollars to flow into the world’s fifth-largest economy.

The rupee has also fared better than most of its Asian peers over the first half of calendar year 2024 aided by portfolio inflows, a strong macroeconomic backdrop and intervention from the Reserve Bank of India (RBI).

The currency is down 0.2% over 2024 so far even as most major Asian currencies have fallen between 2% to 7%, pressured by fading expectations of aggressive rate cuts by the US Federal Reserve. Market participants expected the Fed to deliver up to 6 rate cuts of 25 basis points at the start of the year but they have since pulled back their bets to about two cuts over 2024.

Foreign inflows worth $8.1 billion into local debt have also aided the rupee even as overseas investors remained net sellers of Indian equities over the year so far.

India’s current account balance was also at a surplus for the first time in 10 quarters in the January-March period, helped by higher service exports and private transfer receipts.