RBI Expected to Maintain Rupee Stability Amid Dollar Demand

The Indian rupee is expected to open little changed on Tuesday due to persistent dollar demand and speculation that the central bank will prevent the currency from reaching an all-time low. Non-deliverable forwards suggest the rupee will open nearly unchanged from its previous session level of 83.4875. Dollar demand from oil companies and daily corporate outflows have been putting pressure on the rupee, with a lack of selling interest observed. Traders anticipate the Reserve Bank of India (RBI) to maintain the rupee around the 83.50-83.55 level. The rupee has been trading in a range of approximately 83.35-83.50 in recent sessions.

Asian currencies have been mostly rangebound, with US yields stable and the dollar index at 105.20. Investors are closely watching Federal Reserve speakers this week ahead of US consumer inflation data scheduled for release next Wednesday. There is uncertainty regarding the Fed's interest rate outlook, with conflicting data on inflation and softer-than-expected US economic indicators. ING Bank maintains its prediction of a Fed rate cut in September, contingent on specific economic indicators meeting certain criteria.