The Indian rupee is projected to strengthen against the U.S. dollar in 2026, with forecasts pegging the currency at 88.91/$ by end-February, 88.83/$ by end-May, and 89.65/$ by end-November. Analysts cite resilient capital inflows, stable macroeconomic indicators, and supportive Reserve Bank of India policies as key drivers of this trend.
Currency strategists expect the Indian rupee to gain ground against the U.S. dollar in 2026, reflecting India’s robust economic fundamentals and steady foreign investment inflows. The projections suggest a gradual appreciation, positioning the rupee as one of Asia’s more stable currencies in the coming year.
Key Highlights:
- Forecast Levels: INR expected at 88.91/$ (end-February 2026), 88.83/$ (end-May), and 89.65/$ (end-November).
- Macro Drivers: Strong GDP growth, moderating inflation, and resilient domestic demand underpin confidence in the rupee.
- Capital Inflows: Continued foreign direct investment and portfolio inflows are expected to support currency stability.
- RBI Policy: The Reserve Bank of India’s balanced approach to interest rates and liquidity management adds to investor confidence.
- Global Context: Softer U.S. dollar outlook amid potential Federal Reserve rate adjustments enhances rupee’s relative strength.
- Trade Balance: Improved export performance and reduced oil import costs contribute to a healthier current account.
Sources: Economic Times, Business Standard, Mint