Indian rupee opens one paise higher at 88.26/USD ahead of US Fed's rate decision this week

The Indian rupee opened one paise higher at 88.2612 against the US dollar on September 15 ahead of a widely expected interest rate cut at the US Federal Reserve's policy meeting this week.

Market participants believe the Reserve Bank of India has been intervening to cushion the rupee's weakness, to ensure a orderly move and to avoid a sharper selloff. "The RBI's likely presence is helping to contain the pressure and prevent a bigger shakeout," Reuters quoted a dealer with a state-run lender.

The dollar held steady ahead of a pivotal week filled with central bank decisions led by the Federal Reserve, while the euro hardly reacted to Fitch's downgrade of France's credit rating. The dollar index stood at 97.628 during the morning trade, as against 97.550 at previous close.

The US Fed is widely expected to cut interest rates on September 17 as it grapples with a slowing labor market, sticky inflation and a push by Trump for lower borrowing costs. Trump has been putting pressure for months on Fed Chair Jerome Powell to cut rates and repeatedly encouraged him to resign. The median estimate from a Bloomberg survey of economists is for a 25 basis point rate reduction.