Some bankers feel that the move to keep the rupee stable is in line with the government's objective of promoting the rupee globally. In addition to liquidity, lower volatility is one of the main preconditions for a global currency.
Supporting the currency is a decline in crude oil prices, which have fallen to levels of $73. Inflation figures, which reached 5.6% on Wednesday, were also below some analysts' forecasts. Foreign institutional investors were net buyers on Tuesday.
The short-term outlook for the rupee was positive; however, traders were watching for any surprises in the US Federal Reserve's post-meeting statement, which could add to the dollar's strength.
The US Federal Reserve is expected to maintain current interest rates. However, future economic projections and the central bank's dot plot will be closely scrutinized by brokers.
These indicators will provide clues about the potential future trajectory of policy rates. According to CME Group's FedWatch tool, investors are currently considering the possibility of rate cuts starting in May of next year.