Indian Rupee Rises for First Time in a Week on Stimulus Optimism

India’s rupee strengthened for the first time in a week on speculation U.S. and European policy makers will boost monetary stimulus to protect economic growth, supporting demand for emerging-market assets.

The currency pared gains after the BSE India Sensitive Index of local shares erased its advance. Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank can take further steps to sustain the recovery in the world’s largest economy. The European Central Bank will cut interest rates at a meeting tomorrow to shield the economies in the region from its debt crisis, according to 11 of 52 economists surveyed by Bloomberg. The others expect no change. The dollar index, which tracks the currency’s performance against six major trading partners, dropped for the first time in six days.