Rupee Stuck in Range as Dollar Inflows Fail to Boost Currency

The Indian rupee is likely to remain in a narrow range of Rs 94.5-96 per US dollar in the near term, according to a report from Bank of Baroda.

This assessment comes despite large dollar inflows through FCNR deposits and external commercial borrowings (ECBs), which have failed to translate into a commensurate appreciation for the rupee.

The report notes that these inflows have largely been added to the Reserve Bank of India's reserves, rather than being infused into the market. This has limited the sharp appreciation of the rupee that could theoretically follow such an increase in dollar inflows.

The rupee has depreciated by around 28% since January 2022, moving from an average of Rs 74.44 per dollar to Rs 95.47 in August 2026.