NewKerala.com

Rupee to Stay Volatile, May Stabilize at 92.50-93.50 vs Dollar: Experts

The Indian rupee recently hit a record low of 95.23 against the US dollar amid extreme volatility. Pressure stems from high Brent crude prices and massive foreign portfolio investor outflows, which exceeded Rs 1.31 lakh crore in March alone. While an RBI directive to cap market positions provided brief relief, experts believe it only curbs speculation without addressing fundamental weaknesses. The currency may stabilize in the 92.50-93.50 range, but remains vulnerable to global factors like geopolitical tensions and sustained capital outflows.

Key Points: Rupee Volatility to Continue Amid Oil Prices, FPI Outflows

  • Rupee hit all-time low of 95.23
  • RBI directive caps positions to curb speculation
  • FPI outflows of Rs 1.31 lakh crore in March
  • Brent crude above $100 per barrel
  • Volatility expected till April 10
2 min read

Regulatory measures may offer temporary relief, but global pressures will keep the rupee under strain: Experts

Experts say the rupee may stabilize between 92.50-93.50 vs USD, but global pressures like high crude oil and FPI selling will keep it under strain.

"Such a huge volatility on the last working day of the Financial year, I have never seen in over 4 decades. - K N Dey"

Mumbai, March 31

The Indian rupee is expected to remain volatile in the near term and may stabilise in the range of Rs 92.50 to Rs 93.50 against the US dollar, amid continued pressure from rising crude oil prices and sustained foreign investor outflows says experts.

The rupee recently hit an all-time low of 95.23 on Monday, reflecting sharp volatility in both onshore and offshore currency markets. The weakness in the domestic currency comes as Brent crude prices remain above USD 100 per barrel and foreign portfolio investors (FPIs) continue to pull out funds from Indian equities.

According to market data, foreign investors (FPIs) have sold equities worth Rs 1,31,122 crore in March alone, adding significant pressure on the rupee.

The rupee showed some recovery on Tuesday, opening at 93.58, supported by the Reserve Bank of India's (RBI) directive to cap the net open position in the onshore market at USD 100 million by April 10, 2026, but soon the pressure mounted and the rupee touched the 95 mark.

Currency expert K N Dey told ANI on Tuesday that, "The rupee touched yesterday at an all-time low of 95.23 after witnessing a huge volatility in the onshore and the offshore currency markets. Rupee opened yesterday at 93.58, quite strong from the previous Friday's closing on account of the RBI's new directive."

He added, "Such a huge volatility on the last working day of the Financial year, I have never seen in over 4 decades. Yesterday at times the spot arbitrage between onshore and offshore touched more than 30 paisa."

Dey further said that while volatility is expected to continue till April 10, it may not be as extreme as witnessed recently.

"Going forward keeping the war aside, rupee is likely to settle around 93.50 to 92.50 range. But if the war escalates higher then rupee's strength would be limited," he noted.

Echoing similar concerns, V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said that the RBI's move has helped curb excessive speculation in the currency market.

"Even though the RBI directive will curb excessive speculation in the futures market, this is not sufficient to prevent the weakness in the currency which stems from the rising trade and CAD triggered by the spike in crude and sustained FPI selling in the market," Vijayakumar added.

Experts believe that while regulatory measures may provide short-term relief, the rupee will continue to face pressure from global factors such as elevated crude prices, geopolitical tensions and persistent capital outflows.

- ANI

Share this article:

Reader Comments

S
Sarah B
As an expat working here, I see both sides. The volatility is tough for businesses planning investments. The RBI's cap on open positions is a smart regulatory move to prevent speculation, but the fundamental issues of high oil imports and FPI outflows need addressing.
P
Priyanka N
Experts are right. These are just band-aid solutions. The real problem is our dependence on imported crude. Until we seriously push for renewable energy and electric vehicles, we will always be at the mercy of global oil prices. 🇮🇳
R
Rahul R
₹1.31 lakh crore sold in just one month? That's a massive amount of foreign money leaving. It shows a lack of confidence in our markets. We need policies that make India a more attractive long-term investment destination, not just short-term fixes.
A
Aman W
With all respect to the experts, I feel the reporting sometimes amplifies the panic. Yes, there is pressure, but the RBI has strong forex reserves to manage this. The rupee will find its level. We've seen such cycles before.
K
Kavya N
My father, who is a small businessman, is very concerned. The fluctuating rupee makes costing for imported raw materials a nightmare. Stability is crucial for MSMEs to survive and plan. Hope the 92.50-93.50 range holds true.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50