While USD/INR is making new highs at 87.56, panic buying by importers, rising trade war expectation and policy uncertainty are driving the volatility. If the RBI signals a cautious approach to rate cuts, the rupee could find some support. However, if the central bank prioritizes growth over currency stability by cutting the rates, we might see further depreciation in line with REER adjustment.
In the short term, watch out for RBI’s policy stance and global dollar movement—these will be the key drivers for USD/INR in the days ahead..