- Wednesday, March 12, 2025
By: Shubham Ghosh
India’s rupee will trade near its historic low over the next three months, despite a recent recovery, based on a growing trade deficit and global flows into safe-haven US dollars, a Reuters survey covering foreign exchange strategists has found.
After a month of trading near a nadir of 80.065 per dollar, the currency reached a one-month high of 78.490 on Tuesday, providing relief for the central bank — Reserve Bank of India (RBI) — which has been burning through the foreign currency reserves defending 80 per dollar.
However, the revival is not likely to last, Reuters reported. The median forecast in a Reuters poll of 40 analysts in August said it trading back near an all-time low by end October.
Nearly 50 per cent of analysts, 18 of 40, predicted the partially convertible rupee to have reached or breached the 80 per dollar mark in a period three months, compared with just 30 per cent who said so in a poll in July. Most saw it plummeting to a new record low.
Asked what would be the Indian currency’s lowest point against the dollar over the course of the next three months, 16 analysts who responded to an extra question gave a median of 80.50, with a range of 79.75-81.80/$.
Much will depend on what the RBI decides to do with interest rates.
