The Indian rupee opened flat against the US dollar on Tuesday. The local currency traded at Rs 84.06 per dollar.
The rupee had closed flat at 84.07 on Monday.
The Reserve Bank of India will continue to protect the rupee at 84.08 for some more time before it allows a move lower, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. The currency will remain in a narrow range of 84.05-84.10.
The rupee remained the least volatile major currency during September 2024, depreciating by 0.1% month-on-month, the Reserve Bank of India said in its October bulletin.
The dollar index moved to its two and a half month high at 103.92 while US 10-year bond yields moved almost 10 basis points higher to 4.19% on expectations that the Federal Reserve may take measured approach to cut in interest rates and uncertainty on the presidential elections.
"Markets are pricing 89% chances of a 25 bps rate rate cut from Fed as against a month earlier 50% chances of a 50 bps cut. Overall the traders anticipate 41 bps rate cut during the rest of the year. With elections looming, strong growth data and a stable unemployment rate the FOMC could consider slowing the rate cut pace at some point," Bhansali said.
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