Indian rupee to rise to Rs 82-82.50 in FY20: Care Ratings

The Indian rupee is expected to appreciate to around Rs 82-82.50 in FY2025, while in the near term, it will trade between Rs 83-83.50 against the US dollar, a top economist at CARE Ratings said.

According to Chief Economist Rajni Sinha, the Indian rupee is expected to trade between Rs 83-83.50 in the near term, although geopolitical tensions could pose a potential risk.

“We expect the Indian rupee to appreciate marginally to around Rs 82-82.50 during FY2025, given India's strong fundamentals in the context of healthy economic growth of around 7 per cent, around 1 per cent of gross domestic product (GDP). Supported by a comfortable CAD (Current Account Deficit) of per cent. Domestic Product), and there will be an expected increase in FPI (foreign portfolio investment) inflows after India's inclusion in global bond indices,” she said.

Sinha said that although concerns over Iran-Israel tensions have subsided, the strong dollar continues to weigh on emerging market currencies, including the Indian rupee.

He said that so far in the year, the rupee remains the top performer against some emerging market and Asian peers, which is likely to be supported by the RBI intervention.

Markets have reduced expectations of a Fed rate cut after strong economic data and higher than expected inflation in the US. Moreover, recent remarks from Fed officials have been sharp, Sinha said.

He said the market's focus is now on US GDP data to be released on Thursday and personal consumption expenditure inflation data on Friday. The US economy is expected to show resilience. Headline inflation is expected to increase slightly while core inflation is expected to moderate slightly.

Any data surprises may cause market participants to revise their US Fed rate cut bets accordingly, Sinha said.