Indian Rupee: Forecast lifted to 95-100 against US Dollar – DBS
DBS Group Research economists Radhika Rao and Philip Wee assess how the recent surge in global crude prices and an exogenous energy shock are affecting India’s macro backdrop and the Rupee. They highlight constrained policy space, stagflation-lite risks and a weaker Rupee, while noting India’s stronger starting external position. DBS has raised its USD/INR forecast to a 95-100 range for the rest of 2026.
Under pressure against US Dollar amid energy shock
"The energy price shock has dealt two-fold impact on the economy, i.e., supply-side constraints (higher input costs, shortage of fuel supplies, shipping delays and weaker rupee), and demand-side effects (rising pump prices, slowing fuel consumption, and tougher economic environment stoked by higher inflation), besides likely El Niño impact on food and likely rural incomes."
"The policy space is relatively constrained after fiscal and policy stimulus were undertaken last year to offset tariff-related risks."
"Onset of a likely stagflation-lite shock also restraints the central bank from assuming an expansionary stance."
"Measures announced to date largely mirror steps undertaken in 2013 (taper tantrum) and 2022 (Russia-Ukraine crisis), with concurrent effort to strengthen both sides of the balance of payment equation - current account (through gold/silver curbs and lower energy demand as prices rise) and financing item i.e., capital account (attract inflows, likely other steps to boost non-FPI/FDI inflows)."
"We have lifted our USD/INR forecasts into a 95-100 range for the rest of 2026."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The Capital Trends Behind the AI Computing Power Rebound: JPMorgan Fund Flows Reveal Retail Buy-In "Shrinking," Pouring Into Nvidia, SanDisk and Other Computing Power Core Companies
What has been revealed is not a "complete withdrawal of retail investors from AI," but rather a significant slowdown in overall market entry pace under macroeconomic pressure, with stock selections becoming more concentrated. In response to the Federal Reserve's unanimous decision to raise interest rates by 25 basis points, increasing the policy rate to 3.75%–4.00%, JPMorgan's assessment is: if this is simply a withdrawal of last year's "insurance-style rate cuts" during a shallow rate hike cycle—and if corporate earnings remain strong and the Middle East situation does not further spiral out of control—the stock market is still capable of absorbing rising interest rates.
Vote Result 7-2! Bank of Japan Raises Interest Rates at Fastest Pace Since 1990, Does Not Signal a Clearly More Hawkish Stance
The Bank of Japan has raised interest rates to 1.25%, marking the highest level since 1995 and the sixth increase since exiting the negative interest rate policy in March 2024. Out of the nine committee members, Asada and Sato voted against the hike, citing the current economic situation, reflecting ongoing internal disagreements over further tightening. In its statement, the Bank of Japan indicated it will continue to raise rates and adjust the degree of monetary easing, but the forward guidance language showed limited changes from the July statement, without sending notably more hawkish signals.
Crypto prices
More
