MUMBAI, Sept 20 (Reuters) - The Indian rupee rallied on Friday to climb above 83.50 per U.S. dollar for the first time since late July, boosted by dollar sales by foreign banks and a rise in most of its Asian peers.

The rupee was at 83.4850 against the U.S. dollar as of 12 noon IST, its strongest level since July 9. The currency was up 0.2% on the day and on course to post its best single day since May 2024.

Two-large U.S. based banks have been "present on offer (on USD/INR)," since early in the session, likely on behalf of custodial clients, a foreign exchange trader at a state-run bank said.

Indian benchmark equity indices scaled record highs on after an outsized interest rate reduction by the U.S. Federal Reserve on Wednesday and the anticipation of a soft landing for the world's largest economy boosted risk appetite.

Asian currencies were mostly higher between 0.1% to 1%. The dollar index fell 0.2% to 100.43 and was hovering close to its year-to-date low.

State-run banks were spotted bidding for dollars intermittently, which is likely related to a "mix of (dollar) buying," for their importer clients and on behalf of the Reserve Bank of India (RBI), a senior trader at a foreign bank said.

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https://www.reuters.com/markets/currencies/indian-rupee-strengthens-above-8350usd-first-time-over-two-months-2024-09-20/