Mumbai: The Indian rupee strengthened on Thursday tracking the gains in Asian currencies.

Rupee closed at 70.90 a dollar, up 0.26% from Tuesday's close of 71.08. The Indian unit had opened at 71.22 a dollar today and so far has touched a low of 71.35. On Wednesday, Indian financial markets were shut on account of Gandhi Jayanti.

The benchmark Sensex closed down 0.52% or 198.54 points to 38106.87. So far this year, the index has gained 5.65%.

Bond yields fell for third session on expectation of further rate cuts by the Reserve Bank of India (RBI) in its bi-monthly policy statement, due on Friday. RBI will likely lower its benchmark repurchase rate by 25 basis points (bps) to 5.15%, according to a Bloomberg survey of economists. It had cut rates by 35bps in August

The yield on the 10-year Indian government bond was at 6.613% compared with its previous close of 6.664%.

In the year so far, the rupee has weakened 1.56%, while foreign investors have bought nearly $8.16 billion in Indian equities and $3.97 billion in debt.

Most emerging Asian currencies climbed amid broad dollar weakness after US economic data underscored the slowing momentum in the world’s largest economy.

The Malaysian ringgit was up 0.191%, China Offshore 0.196%, Philippines peso 0.403%, Singapore dollar 0.253%, Indonesian rupiah 0.176%, South Korean won 0.066%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.976, down 0.04% from its previous close of 99.019.

Bloomberg contributed this story

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