The Indian rupee depreciated after opening with gains against the U.S. dollar on Friday.
The local currency opened at 81.11, appreciating 11 paise against Wednesday's close of 81.22. It then appreciated to 81.08.
However, the rupee depreciated by 9 paise to end at 81.31, breaking its two-day winning streak.
"The rupee is likely to appreciate further in the month as the dollar is losing steam. Further, the rupee may gain strength on the back of optimistic global market sentiments and FII inflows," ICICI Securities said in a note. "Additionally, a softening of crude oil prices may be supportive for the domestic currency as it will reduce import bills."
Investors will remain cautious ahead of the RBI's monetary policy, where the central bank may slow down the pace of rate hikes, the note stated, adding that the rate hike is expected to be in the range of 25–35 basis points.
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