MUMBAI: The Indian rupee is likely to start the week little changed amid mostly rangebound Asian peers and a central bank that, for now, is defending a psychologically important level.

Non-deliverable forwards (NDF) indicate the rupee will open at around 83.94-83.96 to the US dollar, compared with 83.9550 in the previous session.

The rupee is on six-week losing run, slipping last Wednesday to an all-time low of 83.9725. The Reserve Bank of India’s (RBI) dollar sales in the spot and the NDF and indirect intervention were largely responsible for the currency not dipping past the 84 level.

It is quite evident that “underlying flows and sentiment” are against the rupee currently, a currency trader at a bank said.

“This week, you have pretty important US data points. Whether that proves sufficient for the RBI to relent in its defence of 84 is the question.”

The rupee is the only major Asian currency that is weaker to the dollar this month, albeit marginally.

Other Asian currencies are up between 0.5% and 3.3%.

This underperformance is not a source of worry, according to analysts.

“The rupee’s recent performance is testament not to a lack of investor confidence but to the degree of control that the RBI exerts over the exchange rate these days,” Capital Economics said in a note.

Indian rupee ends moderately higher

The key point is not that the rupee weakened but that it barely moved at all despite volatility in markets, it said.

Asian currencies were mostly quiet on the day, probably awaiting Wednesday’s US consumer inflation data.

The inflation data and the retail sales print on Thursday will help investors gauge the timing and the pace of Federal Reserve rate cuts.

Investors are currently pricing in 100 basis points of rate cuts this year amid lower concerns over inflation and worries over growth.