The Indian rupee opened 8 paise higher at 95.71 against the US dollar on June 5 as investors adopted a wait-and-watch approach ahead of the Reserve Bank of India's (RBI) monetary policy decision.

Currency markets remained largely range-bound as traders assessed the likely outcome of the RBI's policy meeting. According to market expectations, the central bank was widely anticipated to keep the benchmark repo rate unchanged at 5.25%, although investors were also focused on any policy measures aimed at supporting the rupee and improving foreign capital inflows.

The rupee has faced sustained pressure in recent months due to elevated crude oil prices, foreign portfolio outflows, and geopolitical uncertainties. Higher energy costs have increased concerns about India's current account deficit and inflation outlook, prompting market participants to closely monitor the central bank's policy response.

Apart from the interest rate decision, investors are expected to scrutinize RBI Governor Sanjay Malhotra's commentary for signals on future monetary policy actions and potential initiatives to attract additional dollar inflows into the economy. Measures under discussion in the market include steps to enhance foreign investment participation in Indian debt markets and improve foreign exchange liquidity.

Recent RBI interventions in the foreign exchange market, including spot dollar sales and foreign exchange swap operations, have helped stabilize the rupee after it touched record lows earlier this year. However, market participants remain cautious as external risks, including volatile oil prices and global geopolitical tensions, continue to influence currency movements.