By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee was nearly flat on Monday, supported by market expectations that the Reserve Bank of India (RBI) will not allow the currency to weaken below the 84 mark, even as Asian currencies slipped on worries of a slowdown in the U.S.
The rupee was at 83.93 against the U.S. dollar as of 10:20 a.m. IST, nearly unchanged from its close at 83.9475 in the previous session.
The Indian central bank has been “consistently supporting,” the rupee to help it hold above 84, a foreign exchange trader at a state-run bank said.
While there is a small possibility that the RBI may let the currency weaken slightly below the 84 mark, runaway moves remain quite unlikely, the trader added.
The dollar index was slightly higher at 101.3 while Asian currencies declined by 0.1% to 0.5%.
Globally, the focus remains on whether the Federal Reserve will deliver a 25- or 50-basis point (bp) rate cut at its policy decision next week.
U.S. jobs data released on Friday did little to change expectations on that front, with interest rate futures signalling a 70% chance of a 25 bp rate cut, nearly the same as a week earlier.
The rupee is likely to be influenced by inflows related to local IPOs this week while also keeping an eye on U.S. consumer inflation data for August, due on Wednesday.
The dollar-rupee pair is expected to “decline gradually amid USD correction on the back of robust portfolio inflows,” Societe Generale said in a note. The bank expects the currency pair to move to 83.30 by the end of 2024.
Overseas investors have net bought Indian stocks worth $1.3 billion in September so far, according to stock depository data.
(Reporting by Jaspreet Kalra; Editing by Sonia Cheema)
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