Rupee gains marginally to 62/$ despite partial capital control

The Indian rupee opened slightly higher on Friday despite the government imposing restrictions on foreign exchange outflows and gold imports on Wednesday in a new attempt to prop up the currency.

The partially convertible rupee traded at 61.33 and is not far from an all-time record low of 61.80 hit last week. The currency had closed at 61.43 on Wednesday.

The Reserve Bank of India's latest steps to support the currency included cutting the amount of overseas direct investments allowed by Indians.

Separately, the central bank banned imports of gold coins and bars, which constituted about 36 per cent of total billion demand in India last year, and will require domestic buyers to pay cash for the yellow metal, among other measures.

The steps came as data showed the headline inflation rate jumped above the central bank's target range of 4 to 5 per cent in July for the first time since March, making it even harder for the bank to refocus on supporting India's slowing economy.

The Indian authorities fear continued falls in the rupee will exacerbate the current account deficit in the short term, deter investment and further curb growth in Asia's third-largest economy.

RBI's action to tighten rupee liquidity in mid-July and other steps have failed to halt the slide in the currency, which set new record lows on August 6.