New Delhi, Sep 24
As the Indian rupee fell below the 88 mark against the US dollar amidst tariff concerns and FII outflows, Reserve Bank of India is likely to intervene to manage excessive volatility, a report said on Wednesday.
CareEdge Ratings, in a report, maintained its FY26-end USD/INR forecast at 85–87, supported by a soft dollar, a firm yuan, India’s manageable current account deficit, and the prospect of a US–India trade deal.
CareEdge ratings said that the increased FPI selling this year could be due to concerns of 50 per cent tariffs remaining in place, acting as headwinds on India's FY26 growth, taking it to around 6 per cent.
The yuan has appreciated approximately 2.5 per cent year-to-date, eliminating a source of competitive pressure on Rupee observed in first trade war in 2018-19.
As the US Fed is expected to cut rates more aggressively than the RBI, the interest rate differential could widen in favour of the rupee, providing some support, it added.