Rupee Outlook

USD vs INR: The rupee strengthened by 5 paise to 94.53 against the US dollar in early trading on Tuesday, 16 June. Here's what's driving the Indian currency, along with near-term outlook.

INR vs USD: In the interbank foreign exchange market, the rupee opened at 94.70 per dollar and later advanced to 94.60, marking a gain of 58 paise from its previous close.

This has come as foreign direct investment slowed as dollar-adjusted returns on Indian investments declined. However, the trade deal is expected to support capital inflows and improve the balance of payments position.

India-US trade deal impact: Rupee strengthened by 1.2% to 90.40 against the dollar on Tuesday after US President Donald Trump said he would cut the tariff on Indian goods from 25% to 18%.

According to Emkay Wealth Management, the Indian rupee appears to have found relative stability around the ₹90 mark against the US Dollar.

On the market outlook in the coming week, Ponmudi R, CEO - Enrich Money, said that the Indian equities are expected to retain an upward bias, underpinned by strong domestic fundamentals, steady domestic institutional inflows, and expectations of healthy corporate earnings growth.

Market participants noted that the dollar–rupee pair is likely to trade within a narrow range in the near term, as the Reserve Bank of India is believed to be actively defending the 90 level.

Jefferies' Chris Wood suggests that the recent decline of the Indian rupee has been overdone and may signal a bottoming out. With strong foreign reserves and contained current account risks, he believes panic is unwarranted despite the currency’s depreciation against the dollar.

V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that normally when rupee depreciates the RBI will intervene to stabilise the currency by selling dollars.

BofA projects the Indian rupee could strengthen to 86 per US dollar by 2026, attributing recent depreciation to temporary factors rather than structural weakness, amidst global uncertainties and demand for the dollar.