Rupee Recovery Fades as Goldman Forecasts Renewed Weakness Against Dollar
The Indian Rupee has shown signs of recovery against the US Dollar, but Goldman Sachs' six and twelve-month forecasts still point to renewed USD/INR weakness.
The USD/INR exchange rate has already traded above Goldman's three-month forecast of 96, although Wednesday's recovery in the Rupee took it back below that level. The pair stood at 95.8982 on Wednesday morning, down 0.16% from Tuesday's close of 96.0509.
MUFG has a gentler path, predicting 95.50 in December 2026, 96.00 in March 2027, and 96.50 in June 2027. The bank identifies external forces working against RBI support, including the sharp rise in US Treasury yields and renewed oil-price gains.
MUFG notes that India's dependence on imported energy makes oil particularly important for both currency demand and monetary policy. August inflation of 4.82%yoy has already moved above the RBI's 4% target, while India's reliance on imports for roughly 90% of its crude requirements increases its exposure to further energy-price gains.