By Swati Bhat
MUMBAI (Reuters) - The rupee strengthened for a second straight session on Friday, helped by good dollar sales by corporates and as emerging currencies rose as risk sentiment improved on growing hopes for a U.S. debt deal in Washington.
Traders are hoping for more clarity on the U.S. debt ceiling resolution. On Friday, the dollar traded near a two-week peak versus the yen, while growth-linked currencies such as the Indonesian rupiah outperformed.
For the week, the rupee gained 0.6 percent, its second straight weekly rise.
"The market is complacent now but the U.S. debt ceiling will be very crucial," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank.
"If there is no agreement reached soon, it will be very painful."
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The partially convertible rupee closed at 61.07/08 per dollar, half a percent stronger than 61.39/40 on Thursday. The unit moved in a narrow range of 61.01 to 61.37 during the day.
The rupee also benefited as shares rose more than 1 percent to a three-week high as technology stocks advanced after Infosys raised the lower end of its fiscal-year revenue guidance, while property developers gained after the country unveiled new REIT regulations.
The rupee has gained 7.6 percent since the start of September after the Federal Reserve unexpectedly delayed a planned tapering of bond purchases.
Meanwhile, India is looking to attract capital from citizens abroad and is also talking with JP Morgan and others to gain entry to benchmark indexes for emerging market debt in hopes of attracting billions of dollars in investment.
Reserve Bank of India Governor Raghuram Rajan said on Thursday the country is not nearly as troubled as investors fear and stressed that the government has plenty of money to meet its obligations.
In the offshore non-deliverable forwards, the one-month contract was at 61.48, while the three-month was at 62.44.
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 closed at around 61.36 with a total traded volume of $1.93 billion.
(Editing by Subhranshu Sahu)