INR Likely to Weaken Further: USD/INR Seen in 89–90 Range This Month
The Indian rupee is expected to remain under pressure through December, with the USD/INR pair projected to trade between 89–90, according to a report by Bank of Baroda. Despite strong domestic macroeconomic data, global dynamics and trade‑deal uncertainties continue to weigh on the currency.
Key Drivers Behind Rupee’s Depreciating Bias
US–India Trade Deal Progress — The Biggest Trigger
Bank of Baroda notes that any sharp movement in INR—either appreciation or further depreciation—will hinge on developments related to the anticipated US–India trade agreement.
A breakthrough could strengthen the rupee; prolonged delays may extend its weakness.
No Rate Cut Expected from RBI This Week
The report indicates that RBI is unlikely to cut rates in the upcoming Monetary Policy Committee meeting.
Combined with the Fed’s already‑priced‑in rate cut, rate differentials will remain stable, making major currency swings less likely.
Global Dollar Trends Offer Limited Support
Interestingly, the rupee weakened 0.8% in November, even as the US dollar softened during the same period—signaling India‑specific pressures outweighing global cues.
Strong GDP Isn’t Helping the Currency—But Why?
India delivered a standout economic performance:
Q2 GDP growth: 8.2% YoY
GVA growth: 8.1%
Nominal growth: 8.7%
CRISIL upgraded FY26 forecast: from 6.5% → 7%
Yet, despite strong fundamentals, the rupee slid.
This disconnect highlights how:
Capital flows,
trade‑related expectations, and
global risk sentiment
often overshadow domestic economic strength in currency markets.
The Bottom Line
Despite India’s robust macro indicators, INR is likely to stay under pressure, trading between 89–90 per USD this month.
Markets are watching two triggers closely:
RBI’s policy stance (steady expected)
US–India trade deal outcome
Unless one of these produces a surprise, the rupee’s trajectory appears firmly tilted toward mild depreciation.
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