MUMBAI (Reuters) -The Indian rupee rose on Monday, boosted by likely market intervention by the Reserve Bank of India that helped it rebound from Friday’s record low, while near-tenor volatility expectations climbed to a multi-month high.

The rupee was at 89.1625 against the U.S. dollar, up 0.3% as of 10:20 a.m. IST. The currency had dropped to an all-time low of 89.49 on Friday.

Traders said that the central bank likely intervened before the local spot market opened to support the rupee, helping the currency peel away from the historical low.

The sudden slide on Friday caught traders by surprise as the RBI pulled away from defending the 88.80 level after capping the currency’s weakness there for nearly two months.

A bout of portfolio outflows, lingering uncertainty over a U.S.-India trade deal and a pullback in the central bank’s defence of the 88.80 level had sparked a slide in the local currency.

This sparked a jump in near-tenor volatility expectations, with the dollar-rupee pair’s 1-month implied volatility rising above 4% for the first time since early-September.

“With last week’s decisive break above 89, the pair now looks set to establish itself within a fresh 88.90–90.20 band as the market searches for stability,” said Amit Pabari, managing director at FX advisory firm CR Forex.

The rupee’s slide also dented India’s sovereign bonds on Friday, and traders reckon moves in the currency will be a focal point for bond yields. The yield on the 10-year sovereign bond was last a tad lower at 6.5578% after spiking to three-week high on Friday.

Elsewhere, the dollar index was steady at 100.2, while Asian currencies were mostly weaker, showing a muted reaction to a bounce back on wagers on a U.S. rate cut next month.

The odds of 25 basis point cut in December have climbed to nearly 70%, up from near 45% a week earlier, per CME’s FedWatch tool.

(Reporting by Jaspreet Kalra; Editing by Sonia Cheema)