Indian rupee flat amid jittery trade ahead of RBI rate decision

A customer hands a 50-Indian rupee note to an attendant at a fuel station in Ahmedabad, India, October 5, 2018. REUTERS/Amit Dave/Files

MUMBAI, Dec 7 (Reuters) - The Indian rupee was flat against the U.S. dollar on Wednesday as investors awaited the outcome of the Reserve Bank of India's (RBI) policy meeting.

The rupee was trading at 82.59 per dollar, having opened weaker at 82.66. The currency closed at 82.6150 on Tuesday when it saw its worst trading session in over two months.

The rupee has declined 1.7% over the past three days and is trading near a one-month low due to corporate dollar outflows and the slashing of long rupee positions.

"Aggressive" dollar bids by importers ahead of the rupee's opening pushed it down as opposed to expectations that it would strengthen in early trades, said a dealer with a state-run bank.

There's a chance it could weaken further depending on the commentary the RBI providess, but resistance is seen around 82.75-82.90 levels, they added.

The RBI decision, due at 10 a.m. IST, is widely expected to be a 35-basis point (bps) rate hike, as inflation continues to stay above the central bank's tolerance band, with its outlook on growth and prices considered crucial.

Market participants have been further debating whether a change in stance is likely.

Deutsche Bank economists said last week that a change to "'neutral stance' will signal that the RBI can hike, pause or cut at a future stage, as guided by the data and transmission lags."

Meanwhile, Asian currencies traded flat to marginally higher as the dollar index was steady after concerns over slow economic growth boosted demand for the safe-haven currency.

Reporting by Anushka Trivedi in Mumbai; Editing by Janane Venkatraman

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