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Investors are now awaiting the release of September-quarter growth data due at 5:30 p.m. for opening cues next week.
Traders said dollar/rupee forwards have started pricing in a rate cut by the Reserve Bank of India at its policy review on Tuesday despite only 4 out of 45 economists polled by Reuters saying they expect a rate reduction.
"Forwards market and the debt markets are discounting a rate cut next week. In the spot, importers were buying dollars for month-end demand," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank.
"5 percent is expected on GDP, so a number below that will prompt the market to look at a rate cut," he added.
The partially convertible rupee closed at 62.0250/0350 per dollar versus Thursday's close of 61.8750/8850. On the week, the rupee dropped nearly 0.5 percent, its fifth straight weekly fall.
On the month, the rupee declined 1.1 percent.
Hefty gains in the domestic share market also failed to help the rupee gain as foreign fund inflows were easily absorbed by importers looking to meet month-end import commitments.
Shares hit a record high, rising for the third straight session, led by gains in lenders such as State Bank of India after the government said it would cut its stake in state-run banks.
In the onshore forwards, the one-month forward premium dropped to 39.25 points from 41.25 on Thursday while the one-year premiums fell to 436.50 points from previous 445.50 points.
The dollar strengthened on Friday after OPEC decided not to cut oil output, slamming commodity currencies like the Norwegian crown, which fell to five-year lows against the greenback and euro.
Most Asian currencies too weakened against the dollar and fell on the month as well.
In the offshore non-deliverable forwards market, the one-month contract was at 62.30, while three-month was at 62.83.
