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USD/INR forward premiums rose on Friday after Treasury yields plunged overnight on increasing likelihood that the U.S. Federal Reserve will opt for small rates hikes from December.

The USD/INR 1-year implied yield climbed to 2.43%, from 2.31% in the previous session. The October forward premium rose to 1.91 rupees, from 1.82 in the previous session.

"October is catching a bid, thanks to the big fall in Treasury yields and to a small extent, the rally in rupee," a swaps trader said.