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The Indian rupee is expected to rise marginally at open on Wednesday, tracking a recovery on Asian peers and the drop in oil prices, while the Reserve Bank of India's policy decision and the minutes of the last Federal Reserve meeting are also on traders' radar.

The 1-month non-deliverable forward indicated that the rupee will open at 83.93-83.94 to the U.S. dollar compared with 83.9625 in the previous session.

The dollar index was holding near the 102.50 area while Asian currencies rose following the recent selloff. Brent crude dropped 4.6% on Tuesday on news of a possible ceasefire between Hezbollah and Israel.

Meanwhile, index provider FTSE Russell said on Tuesday Indian sovereign bonds will be added to its Emerging Markets Government Bond Index (EMGBI), following a similar move by JP Morgan and Bloomberg Index Services.

The rupee "has a bit going for it today" and "for a change" is likely to trade with a slightly positive bias, a forex trader at a bank said.

"The recovery (on the rupee) will not be noteworthy and probably to 83.90 at max. The RBI policy is unlikely to move (rupee) much."

The RBI is widely expected to maintain a status quo on the key policy rate, while a few economists are betting on a change in stance to "neutral" which could open the door to a rate cut in December.

FED MINUTES

Investors will also be eyeing the minutes of the Fed's September meeting, which will show discussions about what at the time had appeared to be a deteriorating labour market that resulted in all but one policymaker agreeing to a 50-basis point cut.

The debate about 25 or 50 basis points in cuts at the last meeting will likely tell us something about the Fed's reaction function and its view of risks to employment and inflation, Morgan Stanley said in a note.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 84.05; onshore one-month forward premium at 11.50 paise

** Dollar index up at 102.52

** Brent crude futures at $77.4 per barrel

** Ten-year U.S. note yield at 4.01%

** As per NSDL data, foreign investors sold a net $967.8mln worth of Indian shares on Oct. 7

** NSDL data shows foreign investors sold a net $136mln worth of Indian bonds on Oct. 7