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The Indian rupee was slightly up on Thursday, thanks to the U.S. Federal Reserve's rate cut expectations, with some analysts reckoning that factor will contribute to the currency seeing a rally in 2024.

The rupee was quoted at 83.2650 to the U.S. dollar by 11:10 a.m. IST, up from 83.3450 on Wednesday, helped by the dollar index's drop to 101.76 and an uptick in Asian currencies.

The local unit is down 0.7% year-to-date, on course to post its sixth straight annual decline. This losing run is likely to come to a halt in 2024, according to some analysts.

"Given our view that the U.S. Fed will cut rates more aggressively next year than currently priced in by markets, we think that the rupee will strengthen against the U.S. dollar," Capital Economics said in a note.

It expects the rupee to climb to 78 to the dollar by end-2024.

The market has currently priced in about six Fed rate cuts in 2024 as inflation and growth both slow, while the central bank has forecast only three.

"A big part of how rupee and other EM currencies perform next year will primarily depend on how the Fed's easing cycle shapes up in relation to what is currently expected," an analyst at a private sector bank said.

The rupee "so far had not participated" in the dollar's drop, based on the Fed view, "but it could be very different" in 2024, he added.

He did not spell out a specific target for the rupee, but said that a "minimum of" 2% to 3% appreciation was on the cards.