By Nimesh Vora
MUMBAI (Reuters) - The Indian rupee was barely changed to the dollar on Friday on lingering concerns over the U.S. interest rate outlook, while traders reviewed a report that JPMorgan was consulting investors for adding the Asian nation to its emerging-market bond index.
The rupee was trading at 79.8675 per U.S. dollar, compared with 79.88 in the previous session.
The Financial Times reported that JPMorgan is speaking to large investors over addition of India to its widely tracked emerging-market bond index.
The bank is seeking investor views on whether to make a large chunk of Indian government bond market eligible for inclusion in the GBI-EM Global Diversified index of local currency debt, according to the report.
The Indian 10-year bond yield dropped by seven basis points.
"The bond market is reacting to the report, but rupee has barely budged," a trader at a Mumbai-based bank said.
"The rupee's non-reaction in not surprising if you consider the recent price action."
The rupee over the last one week has traded in an about 20 paisa range.
Meanwhile, the dollar index was little changed ahead of Federal Reserve Chair Jerome Powell's speech at Jackson Hole, Wyoming. His comments on inflation and interest rates will be closely scrutinized to gauge how much more policy tightening the U.S. central bank is likely to embark on.
The Fed has already raised rates by 225 basis points this year and it is widely expected that it will increase borrowing cost at each of the remaining three meetings this year. However, expectations regarding the size of the rate hikes differ.
Risk appetite was holding up well heading into Powell's speech. India's equity gauge, the BSE Sensex, and other Asian indexes rose. Oil prices rose after Thursday's pullback, with Brent crude back above $100 a barrel.
(Reporting by Nimesh Vora; Editing by Dhanya Ann Thoppil)