Overview

• The rupee closed at 88.06 on Wednesday after recovering from an all-time low of 88.33 earlier in the week.
• A Reuters poll signaled the currency is likely to hold near current levels with a median forecast of 88.04 by end-September, though over one-third of analysts see a drift toward 90 if tariffs stay in place.
• A Bank of Baroda report projects a 87.5–88.5 trading band in the near term with the central bank prioritizing orderly moves over defending a specific level.
• Market pressure reflects a new 50% U.S. tariff on Indian exports, about $15 billion in year-to-date foreign equity outflows, and strong dollar demand from importers.
• India’s foreign exchange reserves of roughly $690 billion provide capacity to smooth swings, and some market participants argue mild depreciation could help exporters.