The Indian rupee is the least volatile in the last twenty years and has demonstrated resilience, currently trading at 82.95 against the US Dollar and now showing signs of a structural uptrend. Factors such as narrowing current account deficit, robust forex reserves, and favourable inflation disparities support this trajectory. While RBI intervention aims to maintain stability, the overall outlook suggests a potentially appreciating rupee in the years ahead, with projections of USD/INR reaching 78 by fiscal year 2026, according to a report by YES Securities.
Indian Rupee strengthened during February 2024, helped by strong foreign capital inflows in the Indian debt market, which to an extent counterbalanced the outflows from equity markets.
RBI's persistent Intervention has been thwarting volatility, The Indian Rupee is the least Volatile in 20 years
The Indian Rupee seems to have bottomed around 83.5 against the USD and is due for a structural uptrend, reflected by the resilience in the currency over the past 12 months
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"There has been front-running by foreign banks in Debt markets given the inclusion of India’s sovereign bonds in Global Indices during the next fiscal year. After a stable 2023, the Indian rupee started 2024 on a promising note and has turned out to be the best-performing Asian currency, despite the rise in the dollar index. Market participants expect the rupee to appreciate to the 82 mark in the current calendar year given the healthy capital flows and reasonably higher balance of payment surplus. However, RBI is largely absorbing the dollar inflows which can be manifested by the trend in rising FX reserves. Persistent interventions by the Reserve Bank of India to build FX reserves are restricting the appreciation of the Indian rupee," said Hitesh Jain, strategist, Institutional Equities Research at YES Securities India.
Here are 5 reasons why YES Securities expects the rupee to appreciate to 78 against the US dollar by FY26:
Current Account Trends: A pivotal factor in bolstering the rupee is the narrowing of the Current Account Deficit (CAD), expected to transition into a modest surplus within the next two years. "This shift is propelled by governmental initiatives incentivizing outbound shipments, targeting a combined US$2 trillion value in merchandise and service exports by FY30," said the report.
Narrowing CAD has proven to be supportive for the rupee, with visibility of the Current Account turning into a modest surplus over the next two years
FX Reserves and Inflows: India's burgeoning Foreign Exchange (FX) Reserves serve as a protective barrier against external vulnerabilities, ensuring adequate coverage for external debt obligations. Additionally, continuous inward remittances strengthen the nation's Balance of Payments position.
Growing FX Reserves and augmenting domestic manufacturing will ensure that India’s import cover remains within comfortable levels
Market Dynamics: The Indian debt markets are poised to attract substantial foreign capital inflows, projected at $100 billion over the next three years. Despite potential volatility risks, low Foreign Institutional Investor (FII) ownership of Indian Sovereign Debt mitigates concerns. Similarly, India's Equity Markets, although not yet experiencing peak FII inflows observed in the early 2000s, offer significant potential for increased portfolio investments.
Indian Debt Markets are seen receiving foreign capital inflows worth USD 100bn over the next 3 years. Notwithstanding the hefty inflows, FII ownership of Indian Sovereign Debt will be low, which will avert the risk of high volatility
India’s Equity Markets have not yet seen the same magnitude in FII inflows when compared with the 2003-07 period. The best is yet to come given that FII Net Equity Flows as a percentage of Market Capitalization over the last ten years have averaged well below 0.5%, much lower than the 2003-07 average of 2.5%
FDI and Domestic Manufacturing: India's focus on domestic manufacturing aims to draw more foreign direct investments, particularly with the global value chain moving towards Re-Shoring. This trend is expected to drive Foreign Direct Investments as a percentage of India’s GDP higher.
Indian FDI as % of GDP is now higher than China’s, unlike 10 years ago. Indian Government’s emphasis on domestic manufacturing will continue to lure Foreign Investments
Inflation Dynamics and Monetary Policies: Historically, rupee trends have been shaped by inflation disparities between India and the US. However, with narrowing differentials and Indian inflation rates falling below the global average, the scope for INR depreciation diminishes. Furthermore, a probable alignment among major central banks on the reversal of hawkish monetary policies is anticipated to maintain stability in sovereign yield spreads, curbing significant USD upside against major currencies.
RBI Interventions: Reserve Bank of India (RBI) interventions play a crucial role in shoring up FX reserves to counter INR appreciation.
Persistent interventions by the Reserve Bank of India to build FX reserves are restricting the appreciation of the Indian Rupee
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FAQs
The Indian rupee is the least volatile in the last twenty years and has demonstrated resilience, currently trading at 82.95 against the US Dollar and now showing signs of a structural uptrend.
What is the forecast for USD to INR in 2050? ›
The Indian rupee is currently worth about 0.014 USD. In 2050, we predict that the INR will be worth about 0.02 USD. The US dollar is currently worth about 71.15 INR. In 2050, we predict that the USD will be worth about 100 INR.
How did India's rupee go from most to least volatile in Asia? ›
India has built up one of the world's largest reserves of foreign currency. The RBI has been strategically buying dollars when the rupee is strong and selling when it is weak. This intervention smooths out large fluctuations in the rupee's value, contributing to its stability.
What is the rupee forecast against dollar? ›
For today i.e. September 10th, Tue 2024, 1 US Dollar is equal to 83.96 Indian Rupees. Today's expected low - high USD to INR forecast rates is INR 83.95 - 83.9667. respectively. Change in USD to INR rate from previous day is +0.01%.
What is the lowest rupee value against the dollar? ›
The lowest Indian rupee to US dollars rate was on 6 Agustus 2024 when 1 Indian rupee was worth 0,0119 US dollar.
What is the USD to INR prediction for 2030? ›
USD to INR Forecast 2025-2030: While big banks such as ING forecast USD to INR to keep the 84.00 level in 2025, some AI-based websites are pointing towards a USD to INR strength to 90 in the next years and 100 by 2030. AI Predicts +21.46% rate increase by 2030.
What is the prediction for 1 dollars to rupees in 2025? ›
Dollar to Rupee Forecast For 2024, 2025, 2026, 2027 And 2028
| Month | Open | Low-High |
|---|
| 2025 |
| Jan | 84.49 | 83.14-85.68 |
| Feb | 84.41 | 83.10-85.64 |
| Mar | 84.37 | 83.23-85.77 |
24 more rowsINR To USD Long-Term Forecast
The AI algorithms showcase an average of 89.1 rupees compared to one dollar in the year 2025 and an average of 82.09 in the year 2026.
Why did the rupee touch an all time low against the US dollar India money? ›
Indian rupee closed at a record low against the US dollar on Monday weighed down by likely foreign fund outflows from the Indian stock market and the unwinding of carry trades amid US recession fears that spooked global financial markets.
How stable is the Indian rupee? ›
India's central bank, which is active on both sides of the forex market - buying and selling dollars, has quashed volatility, making the rupee among the least volatile currencies in Asia.
USD to INR Forecast 2024
Projections indicate a potential 1.42% increase over the next six months, bringing the exchange rate to 84.64 INR. The US Dollar is anticipated to experience a 1.64% rise in the next year, with the USD to INR rate expected to reach around ?? 84.82.
What is the prediction for the USD in 2024? ›
We predict only mild strength in the USD in early 2024 because we expect a mild US recession and only a modest increase in volatility and credit spreads, and mild weakness in equity markets. Notwithstanding some expected USD strength in early 2024, the next major move in the USD will be down in our view.
How much is $1 US in India today? ›
1 USD = 83.92025 INR Sep 13, 2024 11:51 UTC.
What is the strongest currency in the world? ›
Kuwaiti Dinar
The Kuwaiti Dinar is renowned as the strongest currency in the world. Introduced in 1961, it has maintained a commanding presence due to Kuwait's substantial oil reserves, which account for a significant portion of its economic output.
What is the poorest currency in the world? ›
Currently, the Iranian Rial is considered the world's least valuable currency. This is the result of factors like political unrest in the country. The Iran-Iraq war and the nuclear program also played a huge part.
Which country's money is most valuable in the world? ›
1: Kuwaiti Dinar (KWD)
Since it was first introduced in 1960, the Kuwaiti dinar has consistently ranked as the world's most valuable currency. Kuwait's economic stability, driven by its oil reserves and tax-free system, contributes to the high demand for its currency.
What will today's dollar be worth in 2050? ›
$1 in 2021 is equivalent in purchasing power to about $2.50 in 2050, an increase of $1.50 over 29 years. The dollar had an average inflation rate of 3.21% per year between 2021 and 2050, producing a cumulative price increase of 150.34%. The buying power of $1 in 2021 is predicted to be equivalent to $2.50 in 2050.
What is the value of 1 dollar in rupees in India 2024? ›
However, 1 dollar in rupees in 2024 is around ₹83. So, how did the USD to INR exchange rate become progressively higher?
How far will a USD go in India? ›
India ($1 USD = 6,732 Indian Rupees)
Some travelers spend less than $20 a day as they sightsee, so it can get you 5 days. For example, in India, $100 can buy 13 nights in good hotels, 30 days in a nice hostel, 4 nice dinners for two, 30 local dinners, domestic flights around India, or a high-quality sari.
What is the prediction for USD to INR in 2024? ›
USD to INR Forecast 2024
Projections indicate a potential 1.42% increase over the next six months, bringing the exchange rate to 84.64 INR. The US Dollar is anticipated to experience a 1.64% rise in the next year, with the USD to INR rate expected to reach around ?? 84.82.
 "Rupee least volatile in 20 years, likely to touch 82 against US dollar (11)")
