The Indian Rupee on Friday opened at a 1-week high of 71.70 against the US dollar with gains of 49 paise after closing at 72.19 in Wednesday's session. It is the highest opening level recorded for rupee since September 7.

On Wednesday, the rupee dropped to a record low of 72.91 per dollar but ended the trading session on a positive note after a Bloomberg report said that Prime Minister Narendra Modi may hold an economic review this weekend to come up with a recovery plan for the currency and oil, according to an undisclosed source.

The government 10-year bond yield opens at 8.10 percent against Wednesday's close of 8.13 percent. Bond yields and prices move in opposite directions.

The gain in rupee and bond prices is to some extent also supported by August CPI number which for the first time in 10-months fell below the RBI's medium target of 4%. Retail inflation measured by CPI stood at 3.69%, which raises the possibility that interest rates will be put on hold in the central bank's upcoming monetary policy meeting on October 5.

So far in this fiscal year, RBI has increased its benchmark repo rate by 50 basis points to 6.5%. 1 basis point is one-hundredth of a percentage point.

In this calendar year, the rupee has plunged by 10.9% while FIIs have sold $731.10 million and $6.37 billion in equity and debt markets, respectively.

Traders in the currency market look for possible steps by the government to curb the further decline in the rupee.

Meanwhile, BSE Sensex also gained 221.33 points or 0.59% to 37,939 in the opening session while the Nifty also added 74 points or 0.6% to 11,443.50.

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