The Indian rupee weakened slightly on Friday even as the dollar lingered near a four-month low against its major peers with traders saying that importers' hedging requirements and foreign banks' dollar purchases weighed on the local unit.

The Indian rupee could face downward pressure on Friday on heightened risk aversion stemming from U.S. tariff uncertainty, compounded by its failure to breach a key level.

A rise in the Indian rupee's volatility, coupled with a decline in the cost of protecting against currency weakness has prompted firms to increase longer-tenor hedges to shield their balance sheets. The Reserve Bank of India's (RBI) apparent tolerance for bigger currency swings and uncertainty brought on by U.

The Indian rupee gained on Wednesday on broad-based interbank dollar sales and after the central bank's firm defence of 87.40-87.50 levels in recent sessions helped keep a lid on speculative bets against the currency.

The dollar index, which maps the strength of the dollar relative to a basket of currencies, slid to 103.6. It was just shy of the 110 mark as recently as late January, with safe-haven demand roiling equities across the Emerging Markets,

Rupee gains against US dollar as American currency index drops, crude oil prices ease, and foreign capital exits India.

The Indian rupee strengthened against the US dollar on Friday, gaining 20 paise to settle at 86.92, driven by a decline in the US dollar index and easing crude oil prices. However, volatile domestic equity markets and foreign capital outflows put pressure on the currency.

Rupee falls against US dollar amid trade tariff uncertainty, foreign fund outflows, but gains on positive equity market.

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The rupee had settled 6 paise lower at 87.12 against the US dollar on Thursday, snapping its three-session rally. It had gained 31 paise in the preceding three consecutive sessions.