sharply increasing hopes of a rate cut by the Reserve Bank of India (RBI).

At 2.05pm, the rupee was trading at 64.47 a dollar, up 0.11% from its Wednesday’s close of 64.54. The rupee opened and touched a high of 64.39 a dollar—a level last seen on 19 June.

Consumer Price Index (CPI) slowed to 1.54% in June from 2.18% in May and factory output index decelerated to 1.2% in May from a 2.6% growth in April. Analyst expects that RBI will cut rates by at least 25 basis points during the RBI policy on August 2 and also give a dovish outlook, raising bets of another rate cut in October.

The 10-year bond yield was at 6.452%, a level last seen on 21 June, compared to its previous close of 6.459%. Bond yields and prices move in opposite directions.

The benchmark Sensex index rose 0.78% or 243.56 points to 32,048.38. So far this year, it has risen 19.11%.

So far this year, the rupee has gained 5.3%, while foreign investors bought $8.26 billion and $14.64 billion in local equity and debt markets, respectively.

Asian currencies were trading higher as dollar weakened to a fresh low for the month after US Federal Reserve chair Janet Yellen expressed concern about persistently low inflation.

Yellen cited “uncertainty about when—and how much—inflation will respond to tightening resource utilization”. She also said the Fed funds rate won’t need to rise much to reach “neutral”, however that level should rise over time, warranting further gradual hikes

South Korean won was up 0.76%, Taiwan dollar 0.53%, Philippines peso 0.31%, Indonesian rupiah 0.27%, Japanese yen 0.15%, Malaysian ringgit 0.11%, China offshore 0.11%, China renminbi 0.08% and Singapore dollar 0.07%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.699, down 0.06% from its previous close of 95.761.

Bloomberg contributed to this story