Rupee gains 7 paise to 72.52 against US dollar, bond yields drop

The rupee is the worst performing emerging market currency having lost almost 14 percent since January this year. Between April and September the rupee has plummeted more than 7 to the dollar and has breached the psychological 73 mark last week.

Global risk appetite was muted after the US Federal Reserve raised benchmark interest rates as expected while sticking to its script of gradual policy tightening.

Higher US interest rates boost dollar prospects and pressure emerging market currencies.

In debt markets, the yields on the 10-year government bonds dropped 0.14 percent to 8.02 percent after closing at 8.03 percent on Thursday. Bond yields and prices move in opposite directions.