MUMBAI: The Indian rupee is likely to open little changed on Tuesday and while the currency may tick up during the session aided by debt and equity inflows, traders expect month-end dollar demand from importers to keep a lid on sharp gains.

Non-deliverable forwards indicate rupee will open at around 82.87-82.88 to the US dollar, barely changed from its close at 82.89 in the previous session.

The dollar index was at 103.74 after slipping nearly 0.2% on Monday while most Asian currencies were rangebound.

Continued debt inflows are likely to “lift the mood,” for the rupee but given the buoyant dollar demand in the 82.85-82.90 zone, do not expect to “see much movement,” during the session, a foreign exchange trader at a state-run bank said.

Foreign investors have net bought Indian bonds worth nearly $2.4 billion in February so far.

The rupee will also be supported this week by inflows related to the rebalancing of MSCI equity indices which is expected to drive passive inflows of $1.2 billion into Indian equities, according to calculations by Nuvama Alternative & Quantitative Research.

Indian rupee ends slightly higher

The rupee is expected to see some gains but month-end dollar demand could limit them, keeping the currency rangebound between 82.80 and 83.05, said Dilip Parmar, an FX research analyst at HDFC Securities.

Meanwhile, another US Federal Reserve official signalled that the central bank was in no rush to cut interest rates, echoing a sentiment from other policymakers who have pushed back against early rate cut expectations.

“With inflation running above target, labor markets tight and demand showing considerable momentum, my own view is that there is no need to preemptively adjust the stance of policy,” Kansas City Federal Reserve Bank President Jeffrey Schmid said on Monday.