- The Indian currency has fallen to a low of 88.76 against the US dollar in 2025 and may drop further.
- The currency has declined over 3% year-to-date and more than 5% over the past year against the USD.
- A report from the Union Bank of India forecasts the currency reaching 90 against the US dollar by March 2026.
- The currency’s recovery depends on external factors like sustained equity inflows and progress in India-US trade talks.
- Trade tensions and tariffs have impacted India’s import-export sector, contributing to the currency’s weakness.
The Indian currency is facing significant pressure against the US dollar in 2025. It reached a low of 88.76 and is expected to continue declining into 2026. The currency has depreciated by more than 3% so far this year and over 5% compared to the previous year, despite signs of weakening in the US dollar index, which struggles to surpass the 100 mark.
According to a recent report from the Union Bank of India, the currency is projected to reach 90 against the US dollar by March 2026. The report states, “By March 2026, fundamentally, we continue to see USD/INR inching towards the psychological threshold of USD 90 levels.”
The report outlines conditions under which the currency might strengthen. It suggests that sustained inflows into equity markets could bolster the domestic currency. Additionally, progress in India-US trade negotiations is critical for improving its position.
Trade relations face obstacles due to tariff policies affecting India’s import-export industries. Businesses have sought government support amid these disruptions. The currency’s strengthening is essential for stabilizing trade movements and normalizing business operations between the two countries.
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