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Currency experts at MUFG project USD/INR to rise from around 94.7-94.8 to 95.50 this year and 96.50 by Q2 2027, despite stronger RBI support. The Indian Rupee weakened to around 94.7-94.8 per Dollar on Tuesday, surrendering part of last week’s gains as Brent crude approached $98 and foreign investors resumed selling Indian assets.

Foreign exchange analysts at MUFG project USD/INR to reach 95.50 in Q4 2026, followed by 96.00 in Q1 2027 and 96.50 in Q2.

That final forecast implies approximately 1.9% upside from the current price of 94.69 and suggests RBI intervention will slow, rather than eliminate, the underlying depreciation pressure.

State-run banks were again seen selling Dollars around 94.70 on Tuesday, extending a sustained period of intervention by the Reserve Bank of India.

The intervention has been backed by unexpectedly large foreign-currency inflows generated through the RBI’s FCNR(B) measures.

MUFG said the programme had attracted more than $130bn by the end of August, giving the authorities “meaningful firepower and ammunition”.

Official RBI data show that India’s foreign-exchange reserves reached a record $740.8bn on August 28, including $600.7bn of foreign-currency assets.

The larger buffer reduces the danger of a disorderly Rupee decline, but it does not necessarily change the direction of travel.

“Existing foreign-currency inflows have enlarged India’s external buffer and curtailed the risk of sharp INR depreciation, but the removal of incremental liquidity support, accelerating credit growth and the lagged inflationary effects of earlier oil-price increases point towards higher INR rates.”

Image: USD to INR rate 3-month chart Oil Brings 95.50 Back Into View The renewed rise in crude prices has made MUFG’s higher USD/INR path more relevant.

Brent near $98 increases India’s import bill and the associated demand for Dollars, while overseas investors have sold a net $1.2bn of Indian equities and bonds during September.

When we last examined MUFG’s Rupee forecast, USD/INR was approaching the bank’s former 94.00 target despite oil trading near $96.

The Rupee subsequently strengthened further as the RBI absorbed Dollar inflows, but the latest oil shock has interrupted that move.

MUFG had described 94 as a temporary destination rather than the beginning of a sustained Rupee appreciation cycle.

“We are currently forecasting USD/INR to move towards 94.00 over the next three to six months, before rebounding towards 96.00 next year as structural portfolio outflows, corporate repatriation and import demand reassert themselves.”

The rebound is now expected to begin from a slightly higher level, with 95.50 forecast before the end of 2026 and 96.50 by the second quarter of next year.

Currency analysts at MUFG also expect 50 basis points of RBI tightening from December.

“We continue to expect 50bp of RBI tightening beginning in December, with the central bank focused on limiting excessive FX volatility rather than engineering sustained rupee appreciation.”

Oil prices, RBI Dollar sales and the September 11 US inflation report will determine whether the USD to INR exchange rate remains contained below 95 or begins moving towards MUFG’s 95.50 forecast.

USD/INR has broken below Goldman's 95-97 range as RBI-linked inflows lift the Rupee, although importer demand and expensive oil threaten the rally. The US Dollar to Indian Rupee (USD/INR) exchange rate has rebounded to around 94.54 after the Rupee briefly drove the pair down to 94.24.

That move carried USD/INR decisively below the 95–97 range expected by Goldman Sachs.

The Indian Rupee has strengthened by almost 1% over the past week, although the US Dollar to Rupee exchange rate remains more than 5% higher since the beginning of 2026.

Near-Term: Goldman Expects USD/INR to Stay Between 95 and 97 Goldman expects Asian currencies to make further progress against the Dollar, but it sees important differences within the region.

“Year-to-date Asian currency performance can be neatly explained by exposure to tech exports. The KRW, SGD, MYR, and TWD have outperformed the less tech-exposed, high-yielding currencies in Asia: INR, IDR, and PHP. Going forward, we expect USD/Asia to grind lower.”

The bank favours currencies with greater exposure to the technology cycle.

“Tech-related currencies such as KRW, TWD, and MYR should outperform others.”

Its Indian Rupee view is considerably more restrained.

“Among the high-yielding currencies, we expect USDINR to remain range-bound between 95 and 97 now that the catalyst for the rally, namely FCNR, is behind us.”

The subsequent decline to 94.24 challenges both the bottom of that range and the assumption that the relevant inflows had already run their course.

The latest Rupee strength has been supported by flows associated with the Reserve Bank of India's temporary measures for attracting foreign-currency funding.

According to the RBI's provisional figures, the facilities generated total inflows of $136.38 billion by 31 August.

Foreign Currency Non-Resident deposits accounted for $127.23 billion of that total.

The FCNR window closed at the end of August, supporting Goldman's argument that this particular source of demand should now fade.

Even so, the scale and timing of the inflows were sufficient to drive USD/INR below 95 before the market could fully absorb them.

The move also carried the pair close to the 94 level highlighted in an earlier Indian Rupee forecast.

USD/INR Outlook: Oil Prices and Importer Demand Could Restore the Range The Indian Rupee's break below 95 may prove difficult to sustain if oil prices remain around $95 a barrel.

India imports most of its crude requirements, so expensive energy increases demand for Dollars and worsens the country's external balance.

Importer buying has already emerged near the recent USD/INR lows, helping the pair recover from 94.24 to approximately 94.54.

A return above 95 would bring the market back inside Goldman's projected range without requiring a broader reversal in the Rupee's trend.

Continued trading below 95, particularly after the FCNR window has closed, would present a more serious challenge to the forecast.

Investors will now watch crude-oil prices, importer Dollar demand, RBI liquidity operations and any further foreign-currency inflows.

US yields, payroll figures and Federal Reserve expectations will determine whether the Dollar regains enough support to restore Goldman's 95–97 range.

Summary:

The USD/INR will trade as an interplay between the US Treasury's bond buyback program and the geopolitical scenarios. Current Setup and Live Chart With the US Dollar entering the week with negative sentiment, USD/INR’s upside may be capped or limited. This is because the rupee has significant exposure to the current geopolitical environment in the Middle East. This factor poses a substantial upside risk for the rupee.

USD/INR is mildly bearish at the moment. But significant oil-related upside risk means the pair’s direction could be driven more by the rupee’s response to oil prices than by the USD’s response to the local fiscal environment.

Last week brought news of the US Treasury’s intention to double its bond buyback program. Under this arrangement, the US Treasury will double the maximum limit of its 10–30-year liquidity-support buybacks from $2 billion to $4 billion per operation, with commencement set for 9 September 2026. The announcement caused a drop in US long-term yields and weakened the dollar’s yield advantage. But any geopolitical escalation puts the rupee on the back foot, meaning the pair could resume the upside even if the greenback is broadly weak.

USD/INR Forecasts: Key Scenarios This Week The scenarios that will determine the USD/INR forecasts are straightforward:

US Dollar ↓ + oil stable → USD/INR ↓ (mildly bearish) Dollar ↓ + oil ↑ sharply → USD/INR could still rise. Dollar ↑ + oil ↑ → strongly bullish for USD/INR. There are asymmetric risks to the USD/INR pair. In other words, any fresh escalation of the US-Iran conflict, particularly regarding the Strait of Hormuz, will quickly override any weakness from the US Treasury buyback intervention.

Macro Drivers for the USD/INR right now 1) The Treasury Buyback Program

The US Treasury’s long-end buybacks are set to increase to at least $4 billion per operation and will cover 10–30-year securities. This has reduced the USD’s yield advantage.

Although this move aims to improve liquidity and reduce pressure on the long end of the U.S. Treasury curve, it could reduce the appeal of USD-denominated assets. This impact is already being felt across several emerging market FX pairs.

2) Oil prices

Elevated oil prices remain the rupee’s biggest threat. India is the world’s third-largest economy, and elevated oil prices hurt the rupee. India’s structural dependence on imported crude means higher prices risk importing inflation into India and keeping import bills high. The accompanying deterioration in the trade balance puts pressure on the local currency. Indeed, persistently high oil prices could weaken the rupee enough to offset any losses the USD suffers from Treasury intervention.

3) Geopolitical risk

The conflict around Iran and the Strait of Hormuz creates three channels of pressure. The first is from higher crude prices, which raise import costs. The second is from higher freight and insurance costs incurred from using longer alternative oil shipping routes. The third is the exit of portfolio funds from emerging markets due to risk aversion. India’s current growth provides some buffer, but it does not reduce the risk premium that hits the rupee amid geopolitical escalation. risk

4) The RBI as a Manager of Rupee Volatility

The Reserve Bank of India (RBI) typically steps in to manage excessive rupee volatility. One way it does this is by deploying some of its external reserves to defend the rupee and prevent a disorderly, outsized depreciation.

USD/INR Price Catalysts 1) Brent crude direction: For the rupee, this is the most important variable right now. Lower Brent crude prices reduce India’s import bill and favor a USD/INR downside. A sharp rise in Brent crude raises import costs and supports the pair. As prices approach $100, this factor becomes more important.

2) US Treasury Yields: The bond buyback program is basically an intervention that determines the yields on long-term US borrowing costs. They were introduced to stabilize the bond market at the long end. If US Treasury yields decline as a result, the US Dollar also declines, and this supports the rupee. Ultimately, this is meant to cap the upside in the USD/INR. The reverse is also the case. If the program fails to curtail the rise in bond yields, we would see the USD regaining lost ground. Rising oil prices are bullish for the USD/INR.

3) Foreign portfolio flows: A decline in US bond yields and a weaker dollar improve the appeal of emerging-market FX such as the rupee. It would favor an influx of foreign portfolio funds into the Indian market. These funds need to convert into the local currency to participate in the Indian market; this is bullish for the rupee. Conversely, a global risk-off episode (such as a geopolitical escalation) could send these portfolio funds fleeing to safety and out of the Indian markets. This is a rupee-negative scenario.

USD/INR Technical Outlook The ascending trendline support is under threat, as the daily candle has violated it. We need to see the 95.24 support level (30 March high) break down for a push lower toward the 94.04 support and the 61.8% Fibonacci retracement of the 8 April – 20 May upswing. Below this level, additional support is seen at 93.25.

Fig 1: USD/INR daily chart showing key price levels (snapshot: 25 August 2026) Conversely, recovery above the trendline maintains its integrity. The bulls would need to force a bounce from there to aim for the 96.99 resistance as the next upside target. However, there is a potential for a pitstop at the most recent high seen on 24 July at 96.67. Only if this point is surpassed can we see a reclaim of 96.99.

Summary:

USD/INR has shown limited movement over the last five sessions, hovering near the 95.00 support with narrow daily ranges and low volatility overall The pattern signals consolidation as markets await clearer cues from dollar strength, RBI liquidity management, oil prices, and capital flows Oil price, US-India trade relations RBI and Federal Reserve comments and policy decisions hold key sway on the USD/INR forex pair's long and medium-term momentum The USD/INR pair moved quite a bit in July 2026, driven by outside forces and local policy responses. The exchange rate began July around 94.7-95.2, climbed to nearly 96.9, and then settled near 95.35-95.40 by month’s end.

According to a Bank of Baroda research note, the rupee depreciated by only about 0.8% for the month, even as global crude oil prices surged more than 20% amid escalating tensions in West Asia. For a currency as sensitive to oil as the rupee, that’s a genuinely soft landing.

Come August and the USD/INR exchange rate hasn’t really moved much in the first week. It’s been stuck around the 95.00 support level, with small daily price changes and not much happening in terms of volatility.

This pattern points to a period of consolidation, and markets appear to be waiting for clearer signals. Both the strength of the US dollar globally and things happening in India are affecting the rate. The Reserve Bank of India is still managing money supply carefully. Oil prices and how much money is flowing into or out of India also have an impact.

For the immediate future, expect the exchange rate to stay in a range. If it drops below 95.00, it might go down to 94.50. If it goes above 95.50, it could try to reach 96.00 again. Most predictions say the rate will likely stay between 94 and 96 for the next few weeks.

Keep an eye on US economic news and any statements from the RBI, as these can change market feelings quickly. For now, the pair shows limited momentum and patience remains key while the market digests recent moves. Traders may find better opportunities once a clearer trend emerges.

This article was originally written in December 2024 and updated on August 10, 2026, to reflect recent developments, including US-Israel/Iran war and ensuing Strait of Hormuz blockade, USD/INR price movements, and the impact of oil price spike. All technical levels and market commentary are based on the latest data available at the time of writing.

USDINR Outlook For the Third Quarter of 2026 Looking ahead to the third quarter, I expect the pair to trade within a fairly tight range. Most market participants expect it to stay between 94 and 97. We might even see it test the lower end of that range if oil prices drop more and capital flows pick up. Some analysts think it’ll gradually stabilize around 95-96 by September’s end, assuming no major external shocks.

The Reserve Bank of India’s (RBI) monetary policy will continue to influence the currency. The central bank is anticipated to maintain the repo rate at its early August review, keeping a neutral monetary stance while closely monitoring inflation.

Factors such as elevated oil prices and potential food price volatility due to monsoon patterns could contribute to sustained inflation, limiting the possibility of any interest rate cuts in the near term. The RBI’s capacity to intervene in the foreign exchange market, supported by robust foreign exchange reserves, is expected to help manage any sharp currency movements.

Global economic conditions will also play a role. A sustained decrease in crude oil prices, de-escalation of tensions in the Middle East, or a weaker US dollar could benefit the Indian rupee. Conversely, increased geopolitical instability or stronger-than-expected economic data from the United States might support the dollar, leading to continued upward pressure on the USD/INR pair.

Impacts of Interest Rates The interest rate story of the first quarter of 2026 didn’t help the rupee. The RBI kept rates steady at its February 2026 meeting, despite the rupee getting weaker and bond yields going up.  The RBI had cut its repo rate by 25 basis points to 5.25% in December 2025.

April brought fresh pressure from rising tensions in Iran, weighing on economic forecasts while pushing prices upward. Still, the central bank held its ground, keeping borrowing costs steady to guard against wider imbalances. 

Meanwhile, US monetary policymakers showed little hurry to adjust their own rates downward. Because of this divergence, investors kept leaning toward American securities, drawn by stronger returns in dollar-based investments.

The Risks Worth Watching India is the world’s third-largest imported of crude oil, and the product’s price oscillations have a significant impact on the rupee. Dollar-denominated crude oil has experienced a slowdown in demand for the last year, as China’s economic growth declined.

The single biggest wildcard remains the unresolved US-India trade relationship. Tariffs on Indian products have made them less competitive abroad. Whether the two countries can agree on something to ease this is probably the most significant factor for the rupee’s performance over the next few years. If they reach a deal, it would strongly suggest the rupee will get stronger. If they don’t, the pressure on it will likely continue.

Oil is another clear risk. The conflict in the Middle East has calmed down a bit, with news of a US-Iran negotiation period and tanker traffic through the Strait of Hormuz slowly returning to normal. However, this could change fast if tensions rise again.

Foreign portfolio flows bring another layer of uncertainty. They’ve seen both heavy outflows and supportive inflows over the past year. Another round of selling in Indian stocks or bonds would quickly test the rupee’s current stability.

USD/INR Historical Chart USD to INR trading dates back to 1973 when the pair was floated in the forex market at an opening price of $1 to 7.98 rupees. By late 1983, the currency pair rose past the psychological level of 10 rupees to the US Dollar. Between then and April 2002, it rallied by 376.41% to 48.76 rupees.

After retracing to 39.9 rupees in November 2007, the USD/INR has been on an uptrend since then. The pair surged to an all-time high of 95.23 in March 2026.

USDINR Historical Chart on the monthly time frame As the US Federal Reserve started to hike rates, Indian rupee started to slide against the US Dollar. In October 2022, the pair surged to a new all-time high of 83.28. This ATH was refreshed in 2023. However, the dollar’s rally in 2024 saw it hit a new ATH on March 22. That’s not all, the upward momentum strengthened through 2025 to peak at 91.05 in December. Rising oil prices and uncertainty in US-India trade relations have added fuel to the pair, pushing it to all-time highs of 96.97 seen in May 2026.

Strain on Indian Equities Markets Indian equity markets influenced USD/INR movements since early July. Foreign portfolio investors became net buyers again. Data from CDSL showed inflows exceeding ₹15,000 crore that month, while NSDL figures put it even higher, close to ₹20,200 crore.

This influx brought fresh dollar supply into the market, offering timely support to the rupee. Stronger equities boosted investor confidence, and a steadier rupee then encouraged more equity buying. The two markets reinforced each other.

During late July and into early August, continued strength in equities provided a buffer against significant declines in the rupee. Domestic institutional investors also played a role by purchasing assets, which helped absorb market fluctuations. This activity mitigated the impact of external pressures on the currency.

The recovery observed in the equity market contributed to a stabilizing effect, assisting the rupee in maintaining firmer positions around the 95.3–95.4 level. However, this positive development does not entirely resolve the challenges. Foreign portfolio investors (FPIs) have recorded net selling activity for the year overall. Year-to-date outflows have reached approximately ₹2.6 trillion.

So while July’s buying offered some relief, it hasn’t reversed the larger trend. Equities have recently provided stability, but they aren’t a game-changer just yet.

USD/INR Quarterly Outlook: Rupee Faces Next Key Resistance At 96.00 in Q3 On the weekly chart, the USD/INR is trading close to 95.30. The overall trend remains upward, supported by its major long-term exponential moving averages.

The price is above the 20-week EMA, which is around 94.80. It’s also well above the 50-week EMA at about 93.50 and the 100-week EMA near 91.80.

This shows that the upward trend is still strong. The Relative Strength Index (RSI) is around 45–50, which suggests a neutral or balanced market sentiment, not showing signs of being overbought.

The main support level is at the 95.00 mark, which is a key psychological level and aligns with the 20-week EMA. After that, the next support is around 94.20, near the 50-week EMA. The key resistance is at 96.20, which is near the recent swing high. If it breaks that, the next resistance would be the all-time record high of 96.96

USDINR chart analysis on August 3, 2026, showing key levels of resistance and support for Q3. Created on TradingView What will be USD to INR Rate in 2027? Long Forecast’s USD to INR forecast 2027 suggests the start of the year around 97.69 rupees. It expects the currency pair to average 98.53 by mid-year before rallying further to 102.82 by the end of the year. The prices can go much higher if the global economy enters a prolonged recession after the ongoing deflationary measures.

USD to INR forecast. Source: longforecast.com USD to INR Forecast 2030 A feasible USD to INR forecast for 2030 is informed by the economic health of India and the US, Fed and RBI’s monetary policy, and the demand for the US dollar as a safe haven. Hence, a strong dollar will likely push USD to INR to a new record high, depending on the key drivers.

However, as an emerging market, India’s currency has the potential to strengthen further in the coming years. From that perspective, USD to INR forecast 2030 will be for the pair to remain within a range for several years.

How to trade USDINR To trade USDINR, one needs to open an account with a reputable forex broker. When researching the best broker, it is helpful to consider their spreads, commissions, and other fees. It is also possible to trade the currency’s derivatives in the form of USDINR futures.  

Summary:

The USD/INR pair fell nearly 0.7% after failing to breach 97.00, driven by active RBI intervention and declining crude oil prices The pair’s rejection near higher levels echoes mid-May failures around 97.00, highlighting persistent resistance without stronger supporting catalysts Rising oil prices and US inflation present key risks, while delayed exporter dollar conversions offer opportunities for further rupee appreciation The USD/INR currency pair experienced a notable reversal on Monday, declining by nearly 0.7% after a period of steady gains since late June. The Indian rupee strengthened, with early trading showing gains of approximately 28 paise, reaching levels near 96.25 against the US dollar, before settling in the mid-95.80s.

This movement mirrors previous attempts to push towards the 97.00 psychological level, including a peak in mid-May. Such instances where a clear trend encounters significant resistance often lead market participants to consider whether the change is temporary or signals a broader shift.

What Drove the Latest Decline? The main source of pressure was a sharp drop in crude oil prices. Brent futures fell over 4% to about $92.74 per barrel, which eased pressure on India’s large oil import bill. Adding to this, positive signals from West Asia emerged, where the United States and Iran indicated a halt to strikes and opened the door for diplomatic talks.

US Ambassador to the United Nations Mike Waltz said negotiations were progressing on multiple fronts. This helped reduce the geopolitical risk premium that had pushed oil prices higher and boosted dollar demand.

A softer US dollar index, which came down from its highs, also helped. Strong buying in domestic equity markets encouraged capital flows, which in turn benefited the rupee.

A Familiar Ceiling Near 97.00 Today’s pullback feels like history repeating. Back in mid-May, USD/INR pushed toward the 97.00 mark but just couldn’t hold. The pair swung through one of its widest ranges in modern history in the first half of 2026, hitting an all-time record high of 96.84 on May 20. It then recovered partly to around 94.35 by late H1. That recovery was helped by RBI intervention, falling crude prices, and a coordinated package of capital-account reforms.

Now, the pattern feels almost repetitive. The pair climbed back toward similar territory over the past week. Wise’s exchange rate data shows it hit a high of 96.888 on July 23, 2026, before rolling over again. Today’s dip to a low of 96.166 on July 27, 2026, suggests the 97.00 zone remains a meaningful resistance level. The pair has now failed to clear it twice.

Risks and Opportunities for Investors For investors and traders monitoring the USD/INR pair, the current situation presents a balanced outlook. Repeated rejections near the 97.00 level indicate a technical ceiling, likely reinforced by consistent dollar selling, potentially including actions by the RBI.

Opportunities may arise for those anticipating a reduction in market volatility. A sustained decrease in oil prices would positively impact India’s macroeconomic balance by reducing the import bill and inflationary pressures.

However, underlying factors that could drive the pair higher remain. Elevated crude oil prices linked to tensions in West Asia and ongoing foreign portfolio outflows are persistent risks that could push USD/INR back towards its recent highs.

Why did USD/INR decline sharply today?

Falling crude oil prices and signals of easing US-Iran tensions reduced dollar demand and supported the rupee in Monday’s session.

How does this compare to earlier moves towards 97.00?

Similar to mid-May, advances near 97.00 failed to sustain, reflecting market caution at higher levels without stronger catalyst.

What should investors watch for in USD/INR going forward?

Going forward, investors should monitor crude oil price movements, the trend of foreign institutional investor outflows, and whether the 97.00 level holds as resistance or experiences a decisive break.

Foreign exchange strategists at MUFG expect the Indian Rupee to recover gradually against the US Dollar over the next year, forecasting USD/INR will ease to 95.00 by the middle of 2027 as foreign capital inflows strengthen and the Reserve Bank of India continues to support the currency.

The USD/INR exchange rate traded around 96.3 on Monday after climbing steadily from below 90.0 earlier this year, with the Rupee coming under pressure from higher oil prices and renewed geopolitical tensions in the Middle East.

MUFG notes that the Indian Rupee has been one of the weaker Asian currencies in recent weeks as Brent crude climbed above US$85 per barrel, increasing concerns over India's import bill and widening trade deficit.

"The Indian rupee remained under depreciation pressure over the past week, with USD/INR trading above the 96.00 levels."

The bank believes renewed tensions in the Middle East have reinforced demand for the US Dollar while persistent importer demand has outweighed improving foreign portfolio inflows.

"Elevated oil prices, a wider trade deficit and firm importer dollar demand remain fundamentally negative for INR."

Even so, MUFG argues that the Reserve Bank of India has continued to limit excessive volatility by intervening in both the spot and non-deliverable forward markets.

"The RBI continued to provide measured support through the spot and non-deliverable forward markets."

A key part of MUFG's constructive medium-term outlook centres on the RBI's special Foreign Currency Non-Resident Bank (FCNR(B)) deposit programme.

Although inflows have so far fallen short of initial expectations, the bank believes they should strengthen over time as banks offer more competitive deposit rates.

"We think it might be a matter of time and this will help improve the outlook for the Indian Rupee."

MUFG argues that larger FCNR(B) inflows should gradually improve market sentiment, alter importer and exporter hedging behaviour and encourage international investors to rebuild positions in Indian assets.

Near-Term USD/INR Forecast: MUFG Sees Rupee Recovering as Capital Inflows Build While MUFG expects near-term trading to remain sensitive to oil prices, geopolitical developments and broad US Dollar strength, it remains optimistic that the Rupee will strengthen once temporary external pressures begin to ease.

"We expect this will help improve the outlook for the Indian Rupee."

Reflecting that view, MUFG forecasts USD/INR at 95.50 by the end of 2026, before the pair falls further to 95.00 by the middle of 2027 as foreign capital inflows improve and pressure on India's external accounts gradually recedes.

The Indian Rupee has remained under pressure this year, with the USD/INR exchange rate trading close to 95.30 despite recent signs of stabilisation.

Citi believes decisive action by the Reserve Bank of India should provide near-term support for the Rupee, although it expects the currency to weaken again over the medium term.

The bank has sharply revised its balance of payments outlook, forecasting a surplus instead of a deficit after the RBI introduced measures to attract foreign capital, including concessional swap facilities and incentives for overseas investment.

According to Citi, these policies demonstrate the central bank's willingness to preserve financial stability and reduce depreciation pressure on the Rupee.

The bank expects these inflows to help push USD/INR towards **93.0** in the near term as concerns over India's external position ease.

However, Citi believes this improvement will prove temporary. It forecasts **USD/INR rising back towards 95.0 over the following six to 12 months**, as the boost from capital inflows fades.

Citi expects the RBI's policy measures to provide short-term relief for the Rupee, while cautioning that medium-term performance will depend on the durability of foreign inflows and the broader US Dollar outlook.