MUMBAI, Sept 16 (Reuters) - The Indian rupee ended unchanged on Monday while dollar-rupee forward premiums rose on heightened chances of an outsized 50-basis-point rate cut by the U.S. Federal Reserve this week.

The rupee ended at 83.8875 against the U.S. dollar, the same as its closing level on Friday.

The currency was unable to benefit from weakness in the greenback in the face of dollar demand from importers, including local oil companies, traders said.

The dollar index was down 0.3% at 100.7, while Asian currencies rose. The rupee is nearly flat over September so far even as most of its Asian peers have strengthened between 0.3% and 2.8%.

The rupee is likely to move in the 83.85-83.98 trading range before the Fed's policy decision on Wednesday, a foreign exchange trader at a private bank said.

Strong local dollar demand alongside likely absorption of inflows by the Reserve Bank of India have kept a lid on the appreciation of the rupee, traders said.

The focus this week squarely lies on whether the Fed will cut rates by 25 or 50 basis points. Interest rate futures currently signal a near 60% chance of the latter, up from 30% last week, according to CME's FedWatch tool.

Dollar-rupee forward premiums have benefited from the shift, with the 1-year implied yield rising 3 basis points to 2.30%, its highest since April 2023.

"We had favoured a 50bp cut, but the latest job and inflation numbers suggest officials will more likely vote in favour of 25bp," ING Bank said in a note.

"Nonetheless, they will leave the door open to potentially more aggressive action down the line," the note said.

The Bank of England and the Bank of Japan will also deliver policy decisions later this week.

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https://www.reuters.com/markets/currencies/rupee-ends-flat-forward-premiums-climb-fed-rate-cut-hopes-2024-09-16/