CareEdge Ratings maintains the FY27-end USD/INR forecast at 89–90, citing easing dollar strength, improving trade sentiment and a manageable current account deficit.
The Indian rupee is expected to trade in the range of 89 to 90 against the US dollar by the end of fiscal year 2027, supported by a softer dollar environment and a manageable current account deficit (CAD), according to a report by CareEdge Ratings.
The ratings agency maintained its USD/INR forecast for FY27-end at 89–90, citing improving external conditions and steady macroeconomic fundamentals. The outlook comes amid signs of recovery in the domestic currency, which has strengthened from recent lows of around 92 per dollar to approximately 90.6.
CareEdge attributed the rebound to improving sentiment following India’s trade deal with the United States and the Free Trade Agreement (FTA) with the European Union. These developments have eased some of the pressure on the rupee and supported capital flows.
“We maintain our FY27-end USD/INR forecast at 89–90,” the report stated, while noting that the rupee remains about 0.5 per cent weaker compared to its level a month ago. This indicates that although the currency has regained some ground, global headwinds continue to influence its trajectory.
A softer US dollar is expected to play a key role in stabilising the rupee. When the dollar weakens, emerging market currencies typically benefit from reduced depreciation pressures and improved capital inflows. CareEdge believes that such an environment will provide support to the rupee over the medium term.
The agency also highlighted the importance of a manageable current account deficit in maintaining currency stability. A controlled CAD reduces external vulnerabilities and lowers the risk of sharp exchange rate swings, particularly during periods of global financial volatility.
While near-term fluctuations cannot be ruled out, especially amid evolving global economic conditions and shifts in US monetary policy, CareEdge expects the broader macroeconomic backdrop to remain supportive.
In its assessment, stable trade dynamics, moderating external pressures and prudent macro management are likely to help the rupee hold within the projected band through FY27, even as global markets remain sensitive to geopolitical and monetary policy developments.
Overall, the report suggests that while the rupee may face intermittent volatility, structural factors are likely to keep it anchored around the 89–90 per dollar range by the end of fiscal year 2027.
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