MUMBAI: The Indian rupee traded in a narrow range on Tuesday, tracking similar movements in the dollar index, with Asian currencies declining ahead of the release of the minutes of the U.S. Federal Reserve meeting.

The rupee ended at 82.79 per dollar, compared with its previous close of 82.7225, but fell less than the likes of the Chinese yuan and the South Korean won that were down around 0.4%.

The dollar index hovered near the 104-mark as Russian President Vladimir Putin made a speech in parliament ahead of Ukraine war’s one-year anniversary.

Investors also awaited the minutes of the Fed’s Jan. 31-Feb. 1 meeting due on Wednesday during U.S. hours.

In the near-term, that has the potential to change the rupee’s range-bound movement if there is a shift in the Fed’s tone, said a state-run bank trader.

Fed Chair Jerome Powell was perceived to be a bit dovish in his speech after the meeting. However, a set of strong data since then has reinforced views of a higher terminal rate.

Fed officials have also been quite hawkish in recent days.

Recovery in Asia FX, fall in oil prices to lift Indian rupee

Trading volumes on the interbank matching system were around $4.3 billion, among the lowest this year, as the rupee held a nine paisa range on Tuesday.

It has traded between 82.34-82.90 range over the previous 10 sessions. The Reserve Bank of India’s likely intervention has contributed to the rupee’s recent moves.

The currency’s expected volatility against the dollar over the next one-month hit a seven-month low during the day.

“While pressures from the current account side are easing off, a case can be made for limited depreciation pressures from a valuation basis (on the rupee),” ICICI Bank economists wrote in a note.

“However, we maintain our call of a continued upside bias in the USD/INR pair driven by a weak capital flows outlook.”