India's Rupee Forecast to Weaken Toward 100-Per-Dollar Level Even as RBI Pushes Back
The RBI's latest moves have helped the rupee recover from 96.79 rupees per dollar to the 95-level over recent days.
TL;DR
- India's rupee is projected to weaken, potentially reaching 100 rupees per dollar by mid-2027.
- Fundamental pressures include high oil prices, a widening current account deficit, and challenging global capital flows.
- The RBI's recent measures, such as curbs on FX speculation and opening a special window for oil marketing companies, offer short-term stability but not long-term structural support.
- Foreign portfolio investors have sold billions in Indian equities this year, increasing pressure on the rupee.
- India's import cover is at its lowest since 2013, making it vulnerable to supply disruptions, particularly due to the Iran war.