The Indian Ruppe (INR) was marginally stronger against the US Dollar (USD) in February 2024. Economists at MUFG Bank analyze USD/INR outlook.

USD/INR to fall to 81.500 by year-end

In the near term in Q1 2024, we expect USD/INR to hover around the 83.00 level as the RBI rebuilds FX reserves before moving more convincingly towards the 82.00 level as the US Dollar weakens in H2 2024.

We maintain our constructive view on INR and see the balance of risks tilting towards INR strength. We expect USD/INR to fall to 81.50 by year-end, even as RBI continues to intervene actively to limit the extent of appreciation