Ahead of the Reserve Bank of India’s (RBI) policy decision, the Rupee was in a narrow trading range against the U.S. Dollar on Wednesday.

India’s currency stood at 82.6800 to the Dollar at the time of writing, compared to yesterday’s 82.70. Indeed, on Tuesday the Rupee was trading within a range of 82.63-82.80.

According to a trader at a Mumbai bank, we may see more so-called quiet days following the 82.80-83.00 currency support, going on to add that it’s unlikely the central bank’s policy will result in a surprise that will bring the currency under that support.

In addition, over three-quarters of economists – 40 out of a total of 52 – forecast the Reserve Bank of India will announce a 25-basis point rate hike, according to a survey carried out between 13th – 27th January. The other 12 economists in the poll forecast no change in the rate, Reuters news agency reports.

Economists forecast India’s central bank will indicate a pause in the rate hiking cycle following the decline in inflation. The country’s inflation rate is predicted to stay under the 6% mark for the third consecutive month in January, according to Barclays.

As the rate hike has been factored in, traders in the Rupee will be focused on whether the central bank will pause the cycle, said CR Forex managing director, Amit Pabari.

“We don’t expect USD/INR to break 83.00-83.25, considering the possibility of RBI intervention,” Pabri stated. The Reserve Bank of India frequently defended the 83 mark for the Rupee in December.

Furthermore, there was little change for Rupee forward premiums, with the one-year implied yield staying close to 2.11%, the Reuters report adds.

Other Asian currencies were generally higher as U.S. Federal Reserve Chair Jerome Powell reiterated last week’s statements that disinflation had started, indicating the likelihood of considerable falls in inflation in 2023.