The Indian rupee gained for a second straight week on Friday on signs European efforts to contain the region's debt crisis were working, boosting sentiment for riskier emerging-market assets. The rupee gained 0.7 percent this week to close at 48.9350/9450 to the dollar, its highest since February 7. It ended at 49.19/20 on Thursday.
"There is some slight bounce with much better sentiment and stability in Europe," said Paresh Nayar, head of fixed income and forex trading at First Rand Bank. "Foreign investor portfolio inflows and dollar weakness have helped rupee to gain this week." Strong foreign inflows have helped the rupee gain around 8 percent this year after its 16 percent drop in 2011. Foreign funds have invested around $9 billion in Indian equities and debt so far in 2012, according to the Securities and Exchange Board of India.
One-month offshore non-deliverable forward contracts were at 48.92. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all ended at around 48.96, on a total volume of $5.5 billion.