Currency exchange analysts forecast USD/INR at 94.00 in Q3 and 94.50 in Q4 as RBI support offsets the drag from elevated oil prices.
The US Dollar to Indian Rupee (USD/INR) exchange rate remained close to 95.75 on Thursday as RBI support sought to contain pressure near the 96 level.
MUFG’s third-quarter target sits around 1.8% below the market.
MUFG expects USD/INR at 94.00 by end-Q3, followed by 94.50 in Q4 and 95.50 in the first quarter of 2027.
That sequence implies near-term rupee recovery from current levels, followed by a gradual return of depreciation pressure after September.
The RBI was active on Thursday as the currency approached 96.
Reuters said the rupee had to “lean on central bank intervention for support” despite gains elsewhere in Asia.
It cited “elevated corporate hedging” as one source of pressure.
Oil remains the Rupee’s central risk
One Mumbai trader said: “Those who want to enter longs (on USD/INR) are waiting for sizeable dips to initiate.”
Reuters said depreciation remained the market bias despite a broadly softer Dollar.
Brent crude above $93 raises India’s import bill and risks pushing domestic inflation higher, limiting the benefit from wider weakness in the US currency.
MUFG warned of “the threat of a turn in current energy market dynamics” if the conflict drags on.
ANZ continues to expect “the first of two 25-basis-point rate hikes in December 2026” if energy prices and the monsoon keep inflation pressure elevated.
The International Monetary Fund projects Indian growth at 6.4% in 2026 and says: “2026 projected consumer prices are expected to increase by 4.7%.”
Strong growth and reserves above $700 billion give the RBI room to smooth volatility, but not permanently offset an oil shock.
The IMF’s Asia-Pacific department said “monetary policy should remain agile. A prolonged energy shock could weaken currencies and generate more persistent inflation through exchange rate pass-through and broader second-round effects”.
OCBC’s 3 August trajectory bias points to 95.20 for September, 94.80 for December and 94.50 for March 2027.
Those trajectory markers reinforce near-term stabilisation rather than a decisive break above 96.
OCBC’s note says: “These are not meant to serve as point forecast for the quarter-end but meant as trajectory bias of the currency pair.”
A separate 10 August market report quoted a private-bank trader saying: “The 96 level seems to be emerging as a hard line against rupee weakness.”
Lower oil prices, renewed foreign inflows and persistent RBI Dollar sales could drive USD/INR towards 94 faster than expected.
Further Middle East disruption, corporate hedging demand or an earlier Federal Reserve hike would instead keep the pair elevated.
MUFG’s forecast therefore points to controlled rupee recovery in Q3, not a lasting reversal of the longer-term depreciation trend.
Our currency coverage draws on live market data, official economic releases and published bank research.
