Indian Rupee May Weaken Further, Likely to Touch 90 Per US Dollar by March 2026

The Indian Rupee may continue to gradually weaken and inch toward the psychological level of 90 per US dollar by March 2026, said a report published by Union Bank of India.

The bank said that the Rupee’s trajectory would continue to be guided by both fundamental and technical factors. On the fundamentals, the broader devaluation trend is seen to continue in the coming year. "By March 2026, fundamentally, we continue to see USD/INR inching towards the psychological threshold of USD 90 levels," said the report.

However, the bank noted, technically, the Rupee can strengthen if there are continued equity inflows or some concrete development in the ongoing India-US trade talks. Under these circumstances, the currency may proceed towards ₹ 87.80 per dollar, while ₹88.30 per dollar would be a key intervening support area.

Conversely, any fresh weakness in the Rupee is likely to see strong resistance near ₹ 88.80 per dollar. It indicates a level around which increased selling pressure normally comes into play. A clear breakout above this could accelerate the currency's slide toward ₹ 89.30 per dollar, the report added.

Furthermore, the Rupee is expected to trade within a narrow range this week, with a slight appreciation bias. This view is supported by the stabilising US Dollar Index (DXY) and cautious foreign portfolio inflows amid elevated domestic equity valuations.

Additionally, it was mentioned in the report that the finalisation of the India-US trade agreement could bring in inflows of USD 2–3 billion. Other supportive factors include Brent crude prices being below USD 64 per barrel, a low October CPI print of 0.25% YoY that has strengthened expectations of an RBI rate cut in December, and steady SIP flows.

The report further highlighted that key future global data includes US retail sales for October, the September trade balance, weekly jobless claims, and FOMC minutes, which will play an important role in assessing dollar strength and the policy course of the Federal Reserve. Flash PMI data for India and the US would be additional pointers that will help frame growth prospects. This year alone, the Rupee has slid to fresh all-time lows, and the bank noted that the recent move into the ₹88–89 range aligns with underlying economic fundamentals.

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