Mumbai: The Indian currency was jammed today between prospects that outsiders would continue to pour funds into the financial system and fears authorities would take steps to limit the local unit’s advancements.

In early trading, the partially convertible rupee stood at 39.315/325 per dollar, within striking distance of a 9-½ year high of 39.27 hit last week after climbing from Friday's closure of 39.36/37.

A senior dealer with a private bank said, “The signals are mixed and the market is a little apprehensive about taking large one-way bets at the moment.”

“I don't expect to see much volatility today,” added the dealer, who anticipates the Indian currency to trade in a 39.30-39.40 range on Monday.

The rupee has gained over 2.5 percent since a U.S. rate cut on Sept. 18 sparked a stockmarket rally that saw the main index hit 16 record highs in 17 sessions to Friday.

The stock index climbed over 1 percent in early dealing today.

The rupee’s gains have been driven by investment flows as foreigners run after striking returns in the aggressive economy, and dealers said they would follow the stock market for path.

But the stock market was also careful after the finance minister P Chidambaram told that the rupee’s increase had taken it out of the government’s comfort zone, with the prospect of central bank intervention looming.

According to latest facts, the RBI has purchased $39.9 billion in the first eight months of the existing year (2007), and market dealers said that RBI intervention to contain the rupee has picked up radically in the last few weeks.