Poll shows Rupee expected to make modest gains against Dollar in the next three months | Finance News

The Indian rupee is expected to see only a slight strengthening against the US dollar in the coming three months, according to a recent Reuters poll. The Reserve Bank of India (RBI) is anticipated to use its foreign exchange reserves to manage volatility and maintain the currency’s relative strength.

Despite most emerging market currencies weakening against the dollar this year, the rupee has remained stable within a narrow range of 82.64/$-83.45/$, experiencing less than a 0.5% decline. The RBI’s intervention in the foreign exchange markets has played a significant role in this stability, with its foreign exchange reserves reaching a record high of $642.63 billion.

Forex strategist Dhiraj Nim from ANZ noted that the RBI’s focus on building up reserves as a defense mechanism against external shocks has helped keep the rupee stable. The outlook for the rupee remains positive, with analysts predicting a modest gain to 83.11/$ in a month and 82.90/$ in three months.

While the RBI is expected to maintain the repo rate this week and potentially cut it in the third quarter, the US Federal Reserve’s decision to reduce borrowing costs could impact the rupee’s trajectory. However, the rupee is forecasted to strengthen by nearly 1.1% to 82.50/$ in six months and around 1.7% to 82.00/$ in a year.

Overall, the rupee’s resilience and the RBI’s proactive measures are likely to support its gradual appreciation against the US dollar in the near future.