Full Breakdown
Indian Rupee Likely to Remain in Narrow Range Despite Fresh Foreign Inflows
8/5/2026, 4:10:43 PM
Core Forecast
A Reuters poll of 36 foreign-exchange strategists conducted between July 31 and August 5 projects the rupee to hold near its current level, trading around 95.25 per U.S. dollar for the next three months and through the end of January 2027. The same poll expects a modest weakening to about 95.95 per dollar over a twelve-month horizon.
Background and RBI Measures
In July, foreign investors became net buyers of Indian equities for the first time in five months, and the Reserve Bank of India (RBI) announced a suite of measures in June aimed at attracting foreign exchange. Those steps have already drawn more than $40 billion, and a separate Reuters survey estimates the RBI could pull in roughly $50 billion by year-end. Nonetheless, the central bank carries forward dollar-denominated obligations exceeding $100 billion from prior market interventions, limiting its capacity to support the rupee’s value.
Data and Statistics
- Rupee down about 6 % year-to-date.
- Foreign-exchange inflows in July: net equity purchases, first net-buyer streak in five months.
- RBI’s foreign-exchange attraction measures: > $40 billion already secured; median estimate of $50 billion by end-2026.
- Forward dollar commitments: > $100 billion as of June.
- Repo rate expectation: 68 of 72 economists surveyed anticipate the RBI will keep the repo rate unchanged at 5.25 % on the upcoming Wednesday, with rates likely on hold at least until early 2027.
Official Statements & Responses
Strategists note that the recent inflows are expected to satisfy the RBI’s balance-sheet requirements rather than fuel currency appreciation. The central bank has so far refrained from adjusting monetary policy to counter the rupee’s weakness, opting instead to rely on its foreign-exchange measures and to maintain the repo rate at the current 5.25 % level.
Verbatim Quotes
- “Inflows will be enough to fund the RBI's requirements rather than be used for currency appreciation. I expect more sideways movement for the rupee ?rather than any upside,” — Anitha Rangan, chief economist at RBL Bank
