MUMBAI: The Indian rupee was little changed on Friday, hovering sideways in holiday-thinned trading, which traders said was characterised by routine corporate dollar demand alongside intermittent presence of state-run banks. The rupee was nearly flat at 89.8325 against the dollar, as of 10:30 a.m. IST. While traders pointed to state-run banks in India intermittently offering dollars, their Chinese counterparts were seen lapping up dollars instead, underscoring the divergent fortunes and outlooks for the currencies of the two Asian giants. The yuan was hovering at the 7 per dollar mark, up about 4% on the year against the greenback and more than 9% against the rupee so far in 2025. While securing a trade agreement with the US is “critical” for the rupee’s performance, increased repatriation of earnings by Chinese exporters could raise the odds of yuan appreciation, analysts at ING said in a note. Meanwhile, dollar-rupee forward premiums extended their slide from the previous session on Friday, with the one-year implied yield declining 8 bps to 2.75% and the 1-month forward premium edging lower to 39.50 paisa after surging earlier in the week. Other Asian currencies were mostly range-bound as well, while the dollar index wallowed near a two-month low and was on course for its worst annual drop since 2017. Expectations of further interest rate cuts by the US Federal Reserve, despite divergent outlooks from some of its peers, have weighed on the dollar. Investors are also waiting for President Donald Trump to nominate a Fed chair to replace Jerome Powell, whose term ends in May. Elsewhere, markets in Australia, Hong Kong, and most of Europe are closed on Friday, with liquidity expected to be thin as traders turn their focus to 2026.