The Indian rupee is expected to open little changed on Thursday amid a decline in U.S. and Asian equities, while market participants awaited the Reserve Bank of India’s monetary policy decision.
Non-deliverable forwards indicate rupee will open at 83.94-83.96 to the U.S. dollar compared with 83.9550 in the previous session.
Asian shares declined following the intraday reversal in U.S. equities. Shares in Japan, Hong Kong and South Korea lost up to 0.8%.
Futures on the S&P 500 Index were little changed after the index declined on Wednesday. At one point through Wednesday’s session, the key U.S. equity index was up more than 1.5%.
Risk appetite “remains shaky” and “you just feel there is a lot of nervousness over what comes next”, a currency trader at a bank said. The dollar/rupee pair should remain well bid through this with “84 unmistakably the level to watch.”
The trader added that the RBI will “be of interest” to the rupee forwards market and not much to the spot.
All economists surveyed by Reuters expect India’s central bank to keep key policy rate at 6.50% and only a handful of economists are forecasting a change in stance. The main focus will be on the comments on liquidity, which right now is in sizeable surplus.
