The Indian rupee is likely to maintain its downward bias at Friday’s opening, as markets await two key events: the Reserve Bank of India’s monetary policy decision and the release of the U.S. non-farm payrolls report later in the day.

In the NDF market , the Indian rupee is trading slightly lower at 85.88-89 after closing at 85.79 yesterday.

The RBI’s outcome will offer critical guidance on the domestic interest rate trajectory. Market consensus anticipates a 25 basis point rate cut—its third consecutive reduction—amid a backdrop of subdued inflation. Notably, the State Bank of India, the country’s largest lender by assets, has adopted a more dovish stance, projecting a 50 basis point cut.

Meanwhile, in the U.S., investors are currently pricing in two rate cuts by the Federal Reserve in 2025. A softer-than-expected jobs report could strengthen the case for further easing, potentially weakening the U.S. dollar and influencing rupee sentiment.

On Friday, Indian equities are expected to open higher in anticipation of the Reserve Bank of India's (RBI) policy announcement, which is widely expected to result in a rate cut.

The benchmark Nifty 50 likely open above Thursday's close of 24,750.90, according to the Gift Nifty futures, which were trading at 24,842.

In its policy announcement, the RBI is anticipated to lower its key interest rates by 25 basis points (bps) for the third consecutive meeting.