Indian Rupee Expected to Trade in Rs 90.40–91.20 Range Amid Equity Inflows
The Indian rupee is expected to trade within a range of Rs 90.40-91.20 per US dollar over the next week, supported by sustained equity inflows and improving structural factors, according to a report by Union Bank of India. Analysts highlighted that continued foreign portfolio investments (FPI) could further strengthen the domestic currency, keeping the rupee on a relatively stable trajectory despite global market fluctuations.
“Sustained equity inflows could push the INR toward Rs 90.10/USD, with Rs 90.40/USD acting as a key interim support. As India-US BTA discussions finalize, the threshold for the rupee has shifted meaningfully. Strong resistance is expected near Rs 90.90/USD, and a break above this level could trigger a move toward Rs 91.20/USD,” the report stated.
Artificial Intelligence to Support Long-Term Rupee Strength
The report also emphasized the role of Artificial Intelligence (AI) in shaping India’s services export outlook, which could provide structural support to the rupee over the long term. “AI is set to reshape India’s services export landscape, with higher-value digital, cloud, and AI-led offerings potentially strengthening export competitiveness and supporting USD inflows-a structural positive for the rupee,” it noted. This indicates that while traditional IT outsourcing faces transitional challenges, the adoption of AI-driven solutions could enhance earnings and bolster foreign inflows.
Rupee Stability Backed by Strong Reserves Despite Trade Deficit
Despite a widening trade deficit of USD 34.68 billion and persistent foreign institutional investor outflows, the rupee maintained a stable trajectory last week, trading consistently within Rs 90.60-Rs 90.70 per dollar. The report attributed this stability to strong macroeconomic fundamentals, record-high foreign exchange reserves of USD 725.73 billion, and investor confidence in India’s economic position. Analysts cautioned that near-term volatility could occur due to sector-specific developments and global risks, but robust capital inflows, services exports, and forex reserves are expected to provide continued support to the domestic currency in the coming weeks.
Overall, while minor fluctuations are likely in the short term, the combination of equity inflows, structural reforms, and AI-driven services growth positions the rupee on a stable path against the US dollar.
(This Article Has Been Syndicated From ANI, Edited Just For Clarity)
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