Indian Rupee: Range-bound with RBI support against US Dollar – Commerzbank
Commerzbank FX analysts Charlie Lay and Moses Lim see USD/INR staying broadly stable as the Reserve Bank of India (RBI) keeps the policy repo rate at 5.25% and remains in wait-and-see mode.
Indian currency, the Rupee, is currently trading in a narrow range against the US Dollar, with support from the Reserve Bank of India (RBI). The RBI has maintained the policy repo rate at 5.25%, and is currently in a wait-and-see mode. The USD/INR exchange rate has fluctuated between 94.00 and 97.00 since May, with analysts predicting a gradual decline towards 93.2 by December 2027.
Strong foreign exchange reserves and past inflows of USD deposits have contributed to this stability. Despite a slight moderation in economic growth this year, the Indian economy is expected to expand by 6.7% in the current fiscal year 2026-2027, up from 8% in the previous fiscal year. Inflation remains stable, with the RBI projecting a 5% rate for the current fiscal year, which is within the 2-6% target range.
The RBI has been successful in attracting foreign capital and stabilizing the Rupee, and will close the Foreign Currency Non-Resident (Bank) or FCNR(B) deposit scheme one month early on August 31st. However, the Rupee remains vulnerable to fluctuations in global crude oil and gold prices.
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