The currency pair’s trajectory will depend on geopolitical developments and evolving macroeconomic conditions from Q2 FY27 onwards.
Prachi Kele,
Lead Economist,
PL Capital
Mumbai, July 31, 2026: USD/INR depreciated by ~10% YoY in past one year, primarily due to heightened global uncertainty, including developments related to the India–US FTA and the US–Iran conflict. However, RBI's timely intervention prevented further depreciation.
During the Fed’s taper announcement period in 2013, FCNR(B) measures were more effective amid a relatively stable global environment. Currently, the USD/INR pair is more sensitive to crude oil price volatility driven by geopolitical tensions. Consequently, despite a healthy response to the FCNR(B) measures announced since June 2026, rupee appreciation has remained limited.
Amid persistent geopolitical uncertainty and supportive FCNR(B) inflows, USD/INR is expected to remain range-bound at 96–97 in FY27. However, the currency pair’s trajectory will depend on geopolitical developments and evolving macroeconomic conditions from Q2 FY27 onwards.
