• Indian Rupee gains some ground on the softer US dollar and lower US bond yields. 
• The Reserve Bank of India (RBI) is likely to keep the key rates unchanged at 6.5% for the sixth consecutive time.
• Traders await the RBI interest rate decision ahead of the US weekly Initial Jobless Claims and speech by Fed’s Barkin. 

Indian Rupee (INR) trades on a stronger note on Thursday amid the weaker US Dollar (USD) and a drop in US bond yields. The Reserve Bank of India (RBI) governor Shaktikanta Das will announce the bi-monthly monetary policy on Thursday, which is anticipated to maintain a status quo on the key interest rate.

The RBI Monetary Policy Committee (MPC) held a three-day meeting for the first policy decision of the calendar year 2024. The markets expect the committee to maintain the repo rate steady at the current level of 6.5% for the sixth consecutive time as inflation approaches the upper tolerance level of 6%. The Indian central bank raised its economic growth forecast to 7% from 6.5% due to encouraging signs in the Indian economy such as an expanding manufacturing PMI and robust growth. Nevertheless, the escalating geopolitical tension in the Middle East could potentially pose a threat, as it could cause disruptions in Red Sea shipping, resulting in elevated consumer prices.

The RBI interest rate decision will be in the spotlight on Thursday. Next week, attention will shift to the Indian inflation data and Industrial Production. Investors will monitor the developments surrounding India’s inflation trajectory.

On the US docket, the US weekly Initial Jobless Claims, and Wholesale Inventories will be released. Also, the Federal Reserve Bank of Richmond President, Thomas I. Barkin is set to speak later on Thursday