By Nimesh Vora
MUMBAI, Feb 8 (Reuters) - The Indian rupee was in a
narrow range against the U.S. dollar on Wednesday ahead of the
Reserve Bank of India's policy decision.
The rupee was at 82.6800 to the dollar by 09:50
IST, compared with 82.70 in the previous session. The local
currency has been a five paisa range so far. On Tuesday, the
rupee was in a 82.63-82.80 range.
There could be a repeat of these quiet days in the wake of
the significant 82.80-83.00 support for the rupee, a trader at a
Mumbai-based bank said. It is unlikely that the RBI policy will
throw up a surprise that could take the rupee below that
support, the trader added.
More than three-quarters of economists, 40 of 52, expected
the RBI to deliver a 25-bps raise, according to a poll conducted
between Jan. 13-27. The remaining 12 predicted no change in
rate.
Economists expect the RBI to signal a pause to the rate hike
cycle in light of the fall in the inflation rate. Barclays
expects India's inflation rate to remain below 6% for the third
straight month in January.
With the rate hike well factored in, rupee traders would be
interested in the path down, whether the RBI will pause, Amit
Pabari, managing director at CR Forex, said.
We don’t expect USD/INR to break 83.00-83.25, considering
the possibility of RBI intervention, Pabri added. The RBI has
defended the 83 level for the rupee repeatedly in December.
The rupee forward premiums were little changed with the
1-year implied yield hovering near 2.11%.
Other Asian currencies were mostly higher after Federal
Reserve Chair Jerome Powell doubled down on statements last week
that disinflation had begun, pointing to chances of significant
declines in inflation this year.
Some market participants had expected Powell to take a more
hawkish tone following a robust U.S. jobs report.
(Reporting by Nimesh Vora; Editing by Dhanya Ann Thoppil)
