As the 90-day pause on U.S. tariffs granted by the U.S. President approaches its end, experts caution that the current stability of the Indian rupee may not continue beyond the first half of fiscal year 2026.
A recent report by MUFG, featuring insights from Senior Analyst Mizhael Wan, projects that the rupee could appreciate to around 83 against the U.S. dollar by Q1 FY26. This anticipated appreciation is linked to expectations of a completed trade deal with the U.S. and inflation rates remaining within the Reserve Bank of India's (RBI) acceptable limits.
However, Indian analysts are more circumspect, anticipating increased volatility after the tariff pause expires. They forecast the rupee to trade between 84 and 86 per dollar during the first quarter of FY2026.
Anindya Banerjee, Senior Vice President at Kotak Securities, noted, "From September 4, volatility is expected to rise as the July deadline to end the 90-day tariff pause approaches. This period may see the rupee breach the 86 per dollar level, depending on RBI's intervention to manage fluctuations."
Dilip Parmar, Senior Research Analyst at HDFC Securities, added that some volatility signals have already emerged. He remarked, "The Indian rupee has recently shown heightened sensitivity to movements in the U.S. dollar, a pattern likely to continue."
