MUMBAI: The Indian rupee was little changed against the US dollar on Thursday as state-run banks bid for the greenback, traders said, keeping the local currency under pressure despite a plunge in oil prices.

The rupee traded at 82.79 per dollar as of 10:05 a.m. IST, against its previous close of 82.8025, and has moved in a narrow six paisa range so far.

Public sector banks were buying the dollar, three traders said.

The rupee was expected to strengthen due to the slump in oil prices but a weaker greenback may have prompted dollar-buying and, hence, the currency has resumed its usual rangebound trading, a dealer added.

Brent crude futures have tumbled nearly 9.5% in the past two sessions – the biggest slide in the first couple of trading days of any year for over three decades – on worries over demand from China and the world economic outlook.

Emerging Asia’s shares mostly advanced, but currencies were mixed.

Indian Rupee gains on oil plunge, tipped to break out of recent tight range

The dollar index slipped 0.5% overnight following minutes of the US Federal Reserve’s December policy meeting, tracking a 9 basis point (bps) fall in benchmark Treasury yields.

The minutes showed that all officials agreed to slow the pace of hikes and reaffirmed that their commitment to fighting high inflation was in no way starting to ebb.

As the US economy cools, investors are perhaps thinking that “the Fed’s ‘no cuts in 2023’ view may be more for cosmetic purposes than a decision that is already carved in stone,” ING analysts said in a note.

The minutes did not impact expectations for the Fed’s February meeting.

Futures show a 67% likelihood of the US central bank hiking rates by a smaller 25 bps.

Meanwhile, a survey from the Institute for Supply Management (ISM) showed its measure of prices paid by US manufacturers in November tumbled to the lowest level since February 2016.