Indian Rupee Poised for Strength Amid Global and Domestic Optimism

The Indian rupee is expected to appreciate against the US dollar, trading between 84-85/USD, bolstered by declining oil prices and positive investor sentiment. However, potential trade tensions between the US and China could pose a risk to this outlook, as highlighted by a Bank of Baroda report.

The Indian rupee is set to maintain an appreciating trend in the immediate future, as highlighted by a Bank of Baroda report. This strength, estimated to fluctuate between 84 and 85 per US dollar, is attributed to favorable domestic and global conditions.

Despite the optimistic outlook, the report warns of potential disruptions from escalating US-China trade tensions. In April 2025, the rupee had already climbed by 1.1 percent following a 2.4 percent rise in March, driven by the weakening US dollar amidst a sluggish US economic forecast.

Investor sentiment has notably improved, underpinned by positive foreign investment inflows into Indian equity markets after months of outflows, signaling renewed interest in emerging markets. The report underscores that India's economic fundamentals and positive growth prospects enhance its appeal to global investors, notwithstanding the looming risk of trade disputes.

(With inputs from agencies.)