Core Viewpoint - The near-term trajectory of the Indian rupee is heavily influenced by the anticipated US-India trade deal, with expectations of appreciation if a positive agreement is reached, while delays could lead to depreciation towards 90-90.5 per dollar [1][11]. Currency Movement Expectations - Economists predict the rupee could appreciate by 100-150 paise to 88/$1 if a favorable trade deal is finalized soon, but further delays may push the currency towards 90-90.5 [1][10]. - This week is expected to be volatile, with the rupee likely trading in the 89-90 per dollar range, reflecting market reactions after breaching the psychological 89 level [1][11]. Volatility and Market Reactions - The recent narrow trading range has been broken, leading to increased volatility, with potential movements between 88.50 and 90.50 anticipated [2][11]. - A sharp depreciation is expected to elevate volatility in November, which had been subdued earlier in the month [4][11]. Reserve Bank of India (RBI) Actions - Experts believe that even with a favorable trade deal, the rupee will not experience deep appreciation, as the RBI is expected to absorb dollars and build reserves while rolling over its short forward book [8][11]. - India's forex reserves were reported at $692 billion as of November 14, down from $703 billion on September 12, with the RBI's short positions in the forward book increasing by $6 billion to $59.5 billion in September [8][11].
Rupee could bounce to 88/$ on trade deal, slip to 90.5 with delay
The Economic Times·2025-11-23 23:59