MUMBAI, May 22 Reuters The Indian rupee is expected to open weaker against the U.S. dollar after the central bank said it will withdraw the highest value currency note from circulation.

Nondeliverable forwards indicate rupee will open at around 82.8082.84 to the dollar, compared to 82.66 in the previous session.

On Friday, the Reserve Bank of India said it will withdraw its highest denomination 2,000rupee note from circulation.

The impact on the rupee from RBI39;s step will be felt through the drop in forwards, analysts said.

The USDINR forward premiums, which are already low, are expected to decline further with rupee money market rates likely to drop significantly on account of excess liquidity that RBI39;s move will lead to, said Abhiskek Goenka, CEO at FX advisory firm IFA Global.

Rupee would come under pressure alongside the fall in the cost of carry the forward premiums, Goenka said.

Conducting sellbuy swaps on USDINR would address cash dollar shortage and suck out rupee liquidity and could offer respite. he said.

82.90 has been an important resistance for the pair. It will be interesting to see if the RBI puts a cap here.

In contrast to the rupee, other Asian currencies were mostly higher after U.S. Federal Reserve Chair Jerome Powell struck a moderately dovish stance, contrary to market expectations.

Powell said on Friday it is still unclear if U.S. interest rates will need to rise further.

After Powells speech, market pricing is firmly back to…