Indian Rupee vs US Dollar: It could hit 87/USD by March 2025
India Rupee vs US Dollar: financial gurus from Standard Chartered and Deutsche Bank think the Indian rupee might drop to 87 against the US dollar by March 2025. This forecast stems from growing global money troubles. It can lead to possible trade fights and the Reserve Bank of India’s (RBI) shifting foreign exchange rules.
What’s Pushing the Rupee Down
Anubhuti Sahay, who leads India Economic Research at Standard Chartered Bank, noticed the RBI’s growing comfort with a weaker Indian rupee. Since November 2024, the INR has lost 1.6% of its value. It is due to a stronger US dollar, a drop seen over many months. The rupee’s fall sped up from 0.47% during April-September to 2.21% from October 2024 onwards.
Money experts point to ongoing weakness in Asian currency markets and the US dollar’s strength as key reasons for the rupee’s slide. The dollar’s overall power comes from a strong US economy. Threats of tariffs, and shrinking interest rate gaps between developing economies and the US are also some reasons.
RBI’s Forex Intervention and Its Effect on Liquidity
The rupee has done better than other Asian emerging market currencies despite ongoing pressures. Thanks to the RBI’s hands-on forex management. But this step has led to liquidity issues in the market. Nomura, a brokerage firm, pointed out a big drop in total liquidity. It was from ₹4.6 lakh crore in late September to just ₹40,000 crore by December 2024. Emkay Global figured that the RBI stepped in with $120 billion across spot forward, and NDF markets in the December quarter alone.
Kaushik Das, who heads economics at Deutsche Bank for India and South Asia, cautioned that changes in capital flows might keep putting pressure on the rupee. It is possible only if the US dollar stays strong. He also said that while the RBI’s decision not to cut rates might slow down the rupee’s fall, it could hurt India’s growth outlook in 2025 and after.
Economic Projections for 2025
Projections collected by the Economic Times suggest the rupee could move between 86.25 and 88.00 against the dollar by March 2025. A few experts predict the rupee might settle between 87.00 and 87.75 by December 2025. On Monday, the rupee dropped under the 86.50/USD mark hitting its record low and becoming the worst-performing major currency .
Madhavi Arora, lead economist at Emkay Global, said the RBI aims to stop the rupee from standing out among emerging markets. She pointed out that future currency shifts will depend on changes in US tariffs under Trump, China’s economic plans, and the Federal Reserve’s money policies.
As global economic doubts persist, market players and policy makers will watch the rupee’s moves . The mix of world trade rules, money flows, and central bank strategies will play a key role in setting the currency’s path in 2025. Keep an eye on more trending news today to follow Indian Rupee vs US Dollar exchange rate changes in India’s economic state.
