MUMBAI, Jan 17 (Reuters) - The Indian rupee was marginally weaker on Friday as the impact of heightened dollar demand, spurred by the maturity of positions in the non-deliverable forwards market, was blunted by likely intervention by the Reserve Bank of India (RBI).

The rupee was at 86.5850 against the U.S. dollar as of 09:55 a.m. IST, down slightly from its close at 86.55 in the previous session.

While the rupee was quoted at 86.63 on the interbank order matching system ahead of the local spot market open, likely intervention by the RBI supported the currency and helped it kick off the session nearly unchanged, traders said.

Heightened demand to buy dollars at the daily reference rate is likely to keep the rupee under pressure at least till mid-day, a trader at a foreign bank said. The reference rate, or the daily fix, was last quoted at a 0.65/0.90 paisa premium, signalling strong dollar bids, per the trader.

The NDF maturity-spurred dollar bids also meant that the rupee was unable to benefit from a broadly softer dollar and a decline in U.S. bond yields.

The dollar index was at 109, after declining for the fourth straight session on Thursday, while the 10-year U.S. Treasury yield was near 4.60% in Asia trade after dipping 5 basis points in the prior session.

Treasury yields declined after Federal Reserve Governor Christopher Waller said three or four interest rate cuts this year are still possible if U.S. economic data weakens further.

Fed officials' median forecasts in December had indicated a total of two rate cuts in 2025.

Investors will now keep a close eye on the inauguration of U.S. President-elect Donald Trump on Monday and on any immediate policy measures he announces.

The rupee is expected to trade "within a volatile range of 86.20 to 86.80," in the near-term, said Amit Pabari, managing director at FX advisory firm CR Forex.

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https://www.reuters.com/markets/currencies/rupee-slips-rbi-intervention-blunts-dollar-bids-spurred-by-ndf-maturity-2025-01-17/