Rupee vs Dollar: INR to remain range bound in near term, offer hedging opportunities to importers, exporters
foreign portfolio investors (FPIs) would have an impact on the movement of rupee against the US dollar bringing it to the downside on occasion. While the USD-INR pair is expected to remain in a range between 82 and 84 for FY 2025, in the near term 83.50 looks like a strong resistance for the pair while 82.50 acts as a strong support.
These aforementioned support and resistance levels will remain sacrosanct for the Reserve Bank of India (RBI) and the Central Bank will likely keep the pair within this range to ensure all-round stability.
However, RBI has already said that it can manage huge inflows with ease which means it will be able to buy dollars and ensure that appreciation is not beyond a certain level. Similarly, with a lot of outflows related to oil, defense and government debt repayment/corporate repayments happening the bidding of $ would also be there and that should keep the upside intact with RBI again stepping in to intervene. So expect the rupee to be in the above-defined ranges for the year ending 2025.
The Indian Rupee was at 73.77 on January 11, 2022, a month before the start of the Russia-Ukraine war after which the level was never seen. After this, the rupee has been declining steadily. It made a low of 83.48 in October 2022. Since then, the rupee has remained in a band of 80.50 to 83.50. The band was further narrowed to 82.50 – 83.50 as RBI intervened from both sides during the period October 2023 to April 2024.
From the above charts, one can see that the $ index has fallen off its highs of
