Mumbai: The Indian rupee firmed on Friday as global risk-taking improved, but traders said the currency would come under pressure if the budget due at 11 a.m. disappoints.   

Finance Minister Pranab Mukherjee is under pressure to trim the country's fiscal deficit amid cooling economic growth and a crisis of stability for the coalition government.     

"We need to see if the government acts on reforms and boosts foreign direct investment. So it is quite possible that both stocks and rupee could fall sharply if the budget disappoints," said a foreign exchange trader with a private sector bank.   

At 10:17 a.m., the rupee was at 50.30/31 to the dollar after hitting 50.23, stronger than Thursday's close of 50.38/39.   

The main stock index was up 0.4 percent.   

The government is likely to pamper to populism and avoid bold reforms after a poor showing by the Congress party in recent state elections.    

But a sharp fall in the rupee is unlikely as the Reserve Bank of India (RBI) is widely expected to step in to curb excessive volatility.    

The central bank has been actively intervening in the currency markets over the past few months to support the rupee, which touched a record low of 54.30 on Dec. 15.   

The RBI said on Monday it sold a net $7.3 billion in January in the spot market, after sales of 7.8 billion dollar in December.    

The one-month offshore non-deliverable forward contracts were at 50.76.   

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange were all around 50.45, on a total volume of 720 million dollar.   

The rally in the dollar took a bit of a breather on Friday as traders booked profits on recent chunky gains ahead of key resistance levels, but the greenback's uptrend was seen intact in line with a brightening U.S. economic outlook.