The Indian rupee remained unchanged against the US dollar on Tuesday, trading at 83.4975 by 9:50 AM IST, Reuters reported. This stability is attributed to the Reserve Bank of India's (RBI) ongoing efforts to prevent sharp declines in the currency. Market participants believe the RBI's interventions have been instrumental in keeping the rupee within a narrow range and reducing volatility expectations. The 1-month implied volatility for the dollar-rupee pair has dropped significantly, down from a 6-month high of 3.35 per cent in late May before the Indian national elections. Foreign exchange traders anticipate the rupee staying relatively stable, unlikely to fall significantly below the 83.50 level. This confidence stems from the presence of dollar selling offers, possibly from state-run banks acting on behalf of the RBI. The broader Asian currency market saw a slight decline ahead of key events in the United States – the release of inflation data on Wednesday and the Federal Reserve's policy decision. Investors are eagerly awaiting updates on the dot plot and Chairman Jerome Powell's comments during the Fed's upcoming meeting. The market currently expects the Fed to cut rates by approximately 38 basis points throughout 2024, down from the previous projection of nearly 50 basis points. Financial experts predict the rupee to follow a similar trading pattern as the previous session, with traders keeping a close eye on the RBI's actions and the crucial 83.50 support level.
