rupee-may-close-at-93-in-2026-on-fdi-outflows-fitch

Fitch, in its Asia currency outlooks report, has said that the US rate cuts will support Asian currencies, but domestic stability will play a key role. The ratings agency said that the rupee may depreciate to ₹93 against the dollar by the end of the current calendar year as foreign direct outflows continue and India decided to purchase the relatively expensive non-Russian crude oil.

 

According to Fitch ratings, the rupee, which had depreciated 5 per cent, crossing ₹92 a dollar in the past year, may depreciate at a slower pace as clarity over the India-US trade deal emerged after the US President, Donald Trump, posted on the social media on the deal and further clarity emerged in the following days.

 

“The US-India trade deal has allowed the rupee to appreciate to INR 90.4/USD after depreciating 5 per cent against the dollar last year. We now expect the rupee to depreciate more slowly over 2026 and trade at around INR 93/USD by the year’s end, as compared to our prior forecast of INR 95/USD. Foreign direct investment outflows from profit repatriation and substitution towards expensive non-Russian crude, as per the trade deal, will drive this depreciation,” said Fitch in its report.

 

Fitch said in its Asia currency outlooks that the US rate cuts will support Asian currencies but domestic stability will play a key role.

 

“A softer US dollar backdrop provides selective support, but gains will be uneven: economies with strong current accounts, credible policy frameworks and stable politics should outperform, while currencies facing fiscal slippage, trade deterioration or intervention-heavy regimes will struggle to sustain appreciation,” the ratings agency said.

 

Earlier, Fitch Ratings had revised India’s GDP growth forecast for FY26 to 7.4 per cent, from 6.9 per cent projected earlier, driven by robust domestic demand and tax reforms. It said that private consumer spending is the main driver of growth in the country this fiscal, “supported by strong real income dynamics, increased consumer sentiment and the impact of recently implemented goods and services tax reforms”. Fitch, which had also projected India’s inflation to average 1.5 per cent, believes that the RBI will keep rates steady over the next two years.

 

Also read: Domestic investors placed ₹1.14L cr in AIFs in 18 months: Crisil