The Indian rupee on August 10 opened marginally lower against the US dollar ahead of key Reserve Bank of bi-monthly monetary policy and US inflation data.

At 9.10am, the home currency opened at 82.81 a dollar, down 0.01 percent from its previous close of 82.82 a dollar.

The 10-year bond yield also opened marginally lower to 7.17 percent from 7.174 percent. Both bond yield and prices move in opposite directions.

All 37 economists polled by Bloomberg predict the RBI’s MPC will maintain the current repo rate of 6.50% on Thursday. RBI is expected to slightly increase the average inflation forecast to 5.40-5.50% from 5.1% in FY24.

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While a status quo of 6.50% in key policy rates is a broadly expected outcome, what one needs to watch closely is the Governor’s comments on inflation. While consumer price inflation has eased broadly in recent months, the recent spike in vegetable price inflation is a matter of worry for policymakers. Prices of certain food items including pulses and cereals have shot up, putting pressure on the household kitty.

Traders are also awaiting US Inflation data due later today that could impact Fed interest rate decisions.  The CPI for July is expected to show a slight acceleration from last year. On a month-to-month basis, consumer prices are seen increasing 0.2%, the same as in June.  Traders put the chance of no rate hike at the Fed’s next policy meeting in September at 86.5%, according to CME FedWatch Tool.

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Asian currencies were trading lower. Taiwan dollar fell 0.23 percent, the Philippines peso declined 0.21 percent, the Japanese yen, Thai Baht and Indonesian rupiah were down 0.1 percent each, South Korean won lost 0.07 percent. Among gainers, China’s Offshore spot gained 0.1 percent.

The dollar index, which measures the US currency against major currencies, was trading at 102.44, down 0.08 percent from its previous close of 102.53.

(with Bloomberg and Reuters inputs)