MUMBAI, India – The Indian rupee held steady Monday (Nov. 20) despite a sharp drop in the U.S. dollar index to its lowest level in more than two months, as continued demand for the greenback from importers weighed on the local currency.

At 10:40 a.m. IST, the rupee stood at 83.2675 against the dollar, slightly changed from the previous session’s close of 83.27.

Asian currencies, led by the offshore yuan and the Indonesian rupiah, weakened against the dollar, both up more than 0.5 percent. The dollar index, which measures the greenback’s strength against a basket of six major currencies, fell to 103.6, its lowest level since early September.

Weaker-than-expected economic data released last week pushed the dollar lower on expectations that the Federal Reserve would slow the pace of monetary tightening.

While a weaker dollar may provide some support to the rupee, traders expect the currency to remain range-bound in the near term. The rupee has been trading in a narrow range between 82.70 and 83.40 since early September.

A weaker dollar, lower oil prices and equity market-related inflows have given the rupee a chance to appreciate,” said a foreign exchange trader at a state-run bank. However, the rupee’s gains could be limited unless local demand for the dollar slows down, the trader added.

Initial public offerings (IPOs) worth about $900 million are expected to hit the Indian market this week. In addition, changes in the MSCI index, which will come into effect on November 30, are also likely to attract inflows of $1.5 billion.

Anand James, chief market strategist at Geojit Financial Services, said, “We continue to be in a frustrated range of 83-83.30. If 83.3 continues to be resistance, expect a slide to 83.19.

Investors are currently waiting for Tuesday’s release of the minutes of the Federal Reserve’s October meeting, which may provide further information on the Fed’s future interest rate policy.