By Nimesh Vora

MUMBAI, Feb 16 (Reuters) – The Indian rupee on Monday is expected to draw support from a broadly struggling dollar and anticipated Reserve ‌Bank of India intervention, while weak domestic equities and patchy flows are ‌likely to weigh.

The 1-month non-deliverable forward indicated the rupee will open largely unchanged from 90.6350 on ​Friday.

After rallying on the U.S.-India trade deal, which took the rupee to 90 per dollar from an all-time low of near 92, the currency has since come back under pressure.

Persistent dollar demand from importers at lower dollar/rupee levels for hedging, erratic equity ‌flows and what bankers have ⁠said are one-time dollar payments have combined to keep the rupee under strain.

The RBI stepped in aggressively last week, surprising bankers, ⁠to alleviate headwinds from flows and curb potential speculative positioning.

Most bankers said the intervention was likely aimed at signalling a preferred zone for the currency, indicating that the RBI ​does not ​want the rupee to slip past the ​91 level at this stage.

“Unless ‌equity flows stabilise, dips (on dollar/rupee) are likely to be bought into,” a currency trader at a mid-sized private sector bank said.

“The bias is for a slow move higher rather than a breakdown, which is quite evident from price action.”

While equity flows turned more supportive of the rupee in the immediate aftermath of the U.S.-India ‌trade deal, they have remained largely erratic.

Foreign investors ​sold more than $800 million worth of Indian shares ​on Friday, according to preliminary data, ​underscoring the fragility of sentiment. Domestic equities fell about 1% ‌on the day.

DOLLAR, U.S. YIELDS

The dollar ​index dipped slightly on ​Friday, extending its weekly decline after softer-than-expected U.S. inflation data strengthened expectations that the Federal Reserve could cut interest rates later this year.

Moves were more ​pronounced in U.S. Treasuries, ‌where the two-year yield fell to its lowest level since 2022, a ​development that does not bode well for the dollar, analysts say.

(Reporting ​by Nimesh Vora; Editing by Harikrishnan Nair)