NewKerala.com

Rupee to Trade in Rs 90.40-91.20/USD Range on Equity Inflows: UBI

The Indian rupee is projected to trade between Rs 90.40 and Rs 91.20 per US dollar next week, supported by continued equity inflows. A Union Bank of India report notes that Artificial Intelligence is poised to structurally boost India's services exports and dollar inflows. While near-term volatility may arise from transitions in traditional IT outsourcing models, strong macroeconomic fundamentals and record forex reserves provide a buffer. Overall, sustained capital inflows and robust external buffers are expected to underpin the currency.

Key Points: Rupee Range Forecast: Rs 90.40-91.20/USD on Equity Inflows

  • Rupee forecast Rs 90.40-91.20/USD
  • Sustained equity inflows provide support
  • AI to reshape services exports
  • Near-term IT outsourcing risks
  • Robust forex reserves cushion currency
2 min read

Rupee likely to trade in Rs 90.40-91.20/USD range next week on sustained equity inflows: UBI Report

UBI report forecasts rupee trading range, cites equity inflows & AI-driven exports as key supports. Near-term IT transition risks noted.

"Sustained equity inflows could strengthen the INR toward Rs 90.10/USD - UBI Report"

Mumbai, February 26

The Indian rupee is expected to trade in the range of Rs 90.40-91.20 per US dollar throughout the next week, supported by sustained equity inflows and improving structural factors, according to a report by Union Bank of India.

The report highlighted that range from a technical standpoint and added that continued equity inflows could further strengthen the domestic currency.

"Sustained equity inflows could strengthen the INR toward Rs 90.10/USD, with Rs 90.40/USD acting as a key interim support. As India-US BTA is finalized; the threshold for the rupee has shifted meaningfully. Likely to face strong resistance near Rs 90.90/USD, a break above this zone could trigger a move toward Rs 91.20/USD," the report stated.

The report also emphasised the role of Artificial Intelligence in shaping India's services export outlook, which could provide structural support to the rupee over the long term.

"Artificial Intelligence is set to reshape India's services export landscape, with higher-value digital, cloud, and AI-led offerings potentially strengthening export competitiveness and supporting USD inflows -- a structural positive for the Rupee," the report noted.

However, the report cautioned that near-term risks remain due to ongoing transitions in traditional IT outsourcing models.

"Near-term transition risks in traditional IT outsourcing models could weigh on earnings sentiment and FPI flows, creating episodic volatility," it added.

The Indian rupee maintained a stable trajectory during the previous week, trading consistently within a narrow range of Rs 90.60-Rs 90.70 per dollar. This stability was observed despite a widening trade deficit of USD 34.68 billion and persistent foreign institutional investor outflows.

The report attributed this stability to strong macroeconomic fundamentals and investor confidence in India's economic position.

The report also added that market participants remained confident in India's macroeconomic buffers, supported by record-high foreign exchange reserves of USD 725.73 billion, which helped cushion the rupee against external pressures.

So, the report outlined that while the rupee may face near-term volatility due to global and sector-specific developments, sustained capital inflows, strong services exports, and robust forex reserves are expected to provide support to the domestic currency in the coming weeks.

- ANI

Share this article:

Reader Comments

P
Priya S
While the report is optimistic, I'm a bit concerned about the "episodic volatility" mentioned. For common people planning foreign travel or education, even small fluctuations matter. Hope the RBI manages it well.
R
Rohit P
Our forex reserves are a real strength! Over $725 billion is a massive cushion. This kind of stability, despite a trade deficit, shows investor confidence in India's story is strong. 💪
S
Sarah B
Interesting analysis. The link between AI and currency strength is not something I'd considered before. If India can become a hub for high-value AI services, it could be a game-changer for the rupee's long-term trajectory.
K
Karthik V
The report is quite technical but reassuring. A range of 90.40-91.20 is manageable. The key is sustained FPI inflows. Let's hope the global sentiment remains positive towards emerging markets like India.
M
Meera T
Good to see banks publishing such detailed reports. It helps retail investors understand the factors at play. The caution about traditional IT models is valid – the sector needs to adapt quickly to the AI wave.

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

Leave a Comment

Minimum 50 characters 0/50