The rupee closed at 96.42 on Tuesday, its weakest in more than two months, as traders waited for Wednesday's Reserve Bank decision. A Reuters poll found about 60 percent of economists expecting a 25-basis-point hike.
The Indian rupee fell on Tuesday to its weakest level in more than two months, closing at 96.42, down 0.1 percent, as equity outflows weighed and traders looked to Wednesday's Reserve Bank of India decision.
Reuters, as published by Business Recorder, said dollar sales by state-run banks, most likely for the RBI, limited the drop. Traders also said the central bank likely used dollar-rupee sell/buy swaps to drain excess rupee liquidity, alongside open-market bond sales and reverse repos in the weeks before the meeting.
About 60 percent of 61 economists polled by Reuters expected a 25-basis-point increase. Swap markets priced a smaller chance of a 50-basis-point rise. The RBI last raised its policy rate in February 2023. Investors will also watch the statement for clues on the path of rates as the economy faces a harder external setting.
The move is a market close, not a policy decision. No rate change had been announced by Tuesday evening.
The monetary-policy outcome is due on Wednesday.