INR might end 2026 at around 93/USD: Bank of America
What's the story
Bank of America (BofA) has predicted that the Indian rupee will end the year at around 93 per US dollar, roughly in line with current levels. The prediction was made by Amish Shah, head of India research at BofA, during an interview. He said that most of the rupee's depreciation is already behind us and unless geopolitical risks escalate significantly, the currency should remain stable.
Market response
RBI's measures have reduced volatility
Shah also noted that the Reserve Bank of India's (RBI) proactive measures have helped reduce volatility in recent sessions. He said concerns over rupee depreciation had previously affected foreign investor returns. However, with expectations of a stabilization in currency weakness, investor comfort toward India could improve. A large part of the rupee depreciation story is now coming to an end, he added.
Oil influence
Crude oil prices remain a key variable for rupee
The trajectory of the crude oil prices remains a key variable for the Indian rupee. This is due to its impact on India's fiscal balance, inflation, as well as current account dynamics. Forex traders have said that the domestic unit continues to be under pressure due to continuous withdrawal of foreign capital, a strengthening dollar, and also rising crude oil prices amid a volatile geopolitical situation.