MUMBAI: The Indian rupee posted its strongest single-day gain in over three years on Friday, rising above the 90-per-dollar mark late in the session, as the central bank intervened to shore up the currency and curb speculative bets, traders said. The currency had slipped to a record low earlier this week on a lingering trade impasse with the U.S. and persistent portfolio outflows, but the central bank’s interventions have led to a 2% rise from the trough. The rupee closed at 89.27 per dollar, rising more than 1% on the day. It also gained the most week-on-week since June with an advance of 1.2%. Traders pointed out that a large state-run bank heavily sold dollars, most likely on behalf of the RBI, near the close of the spot market session at 3:30 p.m. IST. The central bank’s “hammer-like intervention” will surely change the tone on the rupee in the near-term and will keep speculators wary of entering fresh short positions, a trader at a Mumbai-based bank said. The RBI had also intervened heavily earlier in the week when the rupee fell to its all-time low of 91.075. “The RBI appears to have intervened to push back on speculative positioning against the currency,” said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. While volatility could remain elevated next week as trading liquidity thins, the rupee should hold in a 89.10-89.95 range, Parmar said. Earlier in the day, the rupee had lumbered between modest gains and losses, influenced largely by corporate activity and modest declines in Asian currencies. The dollar index was last up 0.2% at 98.66 while Asian currencies were mostly lower, led by the over 1% slump in the Japanese yen after the Bank of Japan delivered a widely expected rate cut. Meanwhile, U.S. dollar/Indian rupee forward premiums rose to three-year peaks on Friday, spurred by excess dollar liquidity, traders unwinding positions and hedging demand in the non-deliverable forward market.