MUMBAI, March 18 (Reuters) - The Indian rupee is expected to have a quiet opening to a week in which the Federal Reserve will put out its new projection on interest rates and inflation.

Non-deliverable forwards indicate the rupee will open broadly unchanged from 82.8875 against the U.S. dollar in the previous session.

The Federal Reserve policy decision is due during U.S. trading hours on Wednesday.

The focus will be on the Fed's dot plot and whether their previous projection of three interest rate cuts in 2024 still holds, an fx trader at a bank said.

"Other than that, we will have the usual tussle between (dollars) inflows and RBI intervention."

The Reserve Bank of India has been mopping up dollar inflows via public sector banks, capping the rupee's rally.

Last week, the local currency had climbed to 82.64 before pulling back on back on likely RBI intervention.

Thanks to these repeated interventions, India's forex reserves have reached a two-year high.

Meanwhile, India's merchandise trade deficit in February was at $18.71 billion, data released on Friday showed, after which economists lowered their forecasts for India's current account deficit for the current fiscal year.

The Fed's decision on Wednesday comes in the backdrop of two U.S. inflation readings that have surprised on the upside.

Investors will be watching if these readings impact the interest rate projections of Fed officials.

"Given the dispersion of predictions by individual Fed members (at the Dec meeting), it would only take two of six Fed members switching from a current 4.625% projection either higher or lower to move the median dot away from three rate cuts to signalling two or four rate cuts in 2024, ING Bank said in a note.

The Bank of Japan's policy decision on Tuesday, meanwhile, will draw equal attention.


** One-month non-deliverable rupee forward at 82.94

** Dollar index at 103.40

** Brent crude futures up 0.4% at $85.7 per barrel

** Ten-year U.S. note yield at 4.3%

** As per NSDL data, foreign investors sold a net $13.8 million worth of Indian shares on Mar. 14

** NSDL data shows foreign investors sold a net $113.5 million worth of Indian bonds on Mar. 14

(Reporting by Nimesh Vora; Editing by Savio D'Souza)