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MUMBAI: The Indian rupee eased for the third week running, as pressures from firmer oil prices and the dollar blunted some of the optimism from a report about adding the Asian nation to a coveted emerging-market bond index.

The partially convertible rupee ended flat at 79.8650 per US dollar on Friday, after touching its weakest level since July 21 at 79.9450 earlier in the session. It was a whisker away from record low of 80.065 hit last month.

The rupee fell 0.1% for the week, having traded in a 20 paisa range over the period.

The Financial Times reported that JPMorgan is seeking investor views on whether to make a large chunk of Indian government bond market eligible for inclusion to its widely tracked GBI-EM Global Diversified index of local currency debt. Bond markets reacted positively to the FT report, with the 10-year bond yield dropping 7 basis points.

However, Kunal Sodhani, vice president of the global trading center at Shinhan Bank, said these inflows were insufficient to help the rupee. “I don’t think the report has anything to do with today’s session. The rupee is weakening because the dollar index is inching closer to 109 and ... there are barely any inflows,” Sodhani said.

“Oil has bounced back to $102, and that pressure is there because the underlying reality of India has not changed. The trade deficit number is still a great concern.” India’s trade deficit widened to an all-time high of $31 billion last month due to higher crude oil imports, prompting worries about the country’s current account funding position.

Asian emerging market currencies were also muted as the dollar gained ahead of the Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium. His comments will be watched for any hints on the trajectory of the central bank’s rate hikes.

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