Rupee set for second straight week of gains

The Indian rupee held its ground on Friday and looked set for a second consecutive weekly gain on improved global risk appetite and strong dollar flows into the local debt and equities.

At 2:51 p.m. (0921 GMT), the rupee was at 51.41/42 to the dollar after hitting 51.28, a level last seen on December 5. It closed at 51.60/61 on Thursday.

The rupee has strengthened by nearly 2.6% so far this week helped by easing concerns over euro zone debt crisis and a rise in foreign funds' investment interest in local debt. The currency had gained 0.7% last week.

Net inflows into Indian debt so far in January stood at about $2.07 billion, substantially more than the $387.15 million invested in equities, data from the Securities and Exchange Board of India showed.

European shares and the single currency rose on Friday after positive comments on the region's outlook from the European Central Bank and the success of Spain's bond auction, with attention focused on Italy's first debt sale of the year.