The rupee was quoted at 87.74 against the U.S. dollar at 09:42 am IST, up from 87.80 on Tuesday. The Indian currency recovered despite losses in most Asian peers.
“At these levels, the rupee will move on its own momentum and today’s decision adds another layer,” a currency trader at a private bank said.
“Markets are firmly positioned for no change in rates, especially after U.S. tariff developments. A rate cut now would be a real surprise and could trigger a decent reaction.”
The Reserve Bank of India will announce its interest rate decision at 10:00 a.m. IST. A majority of economists in a Reuters poll expect the key policy rate, which stands at 5.50%, to remain at the same level.
Major lenders, including State Bank of India and ICICI Bank, are calling for a rate cut, citing the need to support growth. The RBI’s policy decision comes at a time of escalating trade tensions between India and U.S. following President Donald Trump’s fresh threat of substantial tariffs over India’s continued purchases of Russian oil. The remarks have unnerved markets and added pressure on the rupee, which was within a whisker of its all-time low of 87.95 on Tuesday.
With uncertainty around how far Washington might go on tariffs, traders are closely watching how much the central bank will factor in these external risks while framing its policy guidance.
