The Indian rupee traded higher against the U.S. dollar in late morning deals on Friday, following suspected intervention by the Reserve Bank of India to contain excessive fall in the currency as well on firm Asian cues.

The benchmark BSE Sensex was up 282 points or 1.09 percent at 26,142, while the broader Nifty index was up 103 or 1.29 percent at 8,069.

The RBI may have intervened in the forex market in the morning to support the rupee, which was battered by surging dollar, fears about the government demonetisation program and sustained capital outflows from emerging markets.

The rupee appreciated to a 3-day high of 68.16 against the greenback in morning deals and held steady thereafter. Thus, the currency gained 1 percent from a 9-month low of 68.85 hit on Wednesday. If the rupee extends rise, 66.00 is possibly seen as its next resistance level.

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