Rupee may hold Rs 93.50-95.50 range, fiscal slippage risk low: Chief Economist, Elara Capital
Mumbai, August 31
The rupee is expected to remain range-bound at Rs 93.50-95.50 against the US dollar for the rest of the year, while resilient consumption is likely to support the Indian economy. The fiscal deficit is also expected to remain broadly on target, with any overshoot limited to around 10-15 basis points, said Garima Kapoor, Chief Economist and Deputy Head of Research at Elara Capital.
Speaking to ANI on the sidelines of the Elara India Dialogue 2026 in Mumbai on Monday, Kapoor said she believes "the worst in the currency is over" and expects the rupee to remain broadly in the range of Rs 93.50-95.50 against the US dollar for most of the remaining year.
She also highlighted resilient consumption as a key positive for the Indian economy, noting that even demand at the bottom of the pyramid has remained firm based on first-quarter corporate earnings.
"I think the biggest story so far based on the results of quarter one, corporate results has been the consumption has remained fairly resident, even the bottom of the pyramid," she further added.
Kapoor said several factors are supporting resilient consumption, including improved household balance sheets following GST cuts, lower interest rates and income-tax rebates last year. In rural areas, she pointed to the recovery in food prices, government cash transfers and the benefits of rooftop solar, which can help households reduce electricity bills.
She expects consumption to remain a key growth driver through the rest of the financial year, supported by both urban and rural demand. On the fiscal front, Kapoor said "I think after the recent measures, particularly the ones relating to the amount of divestments...the risk on fiscal slippage is very modest."
Kapoor said even if the government falls slightly short of its capital expenditure target, the deviation is likely to be marginal. She expects the fiscal deficit to remain broadly on target, with any overshoot limited to around 10-15 basis points, if at all.
During the same event, Southern Alliance Mining Ltd COO and Executive Director Lim Wei Hung said globalisation is increasingly giving way to fragmented supply chains as countries prioritise national security and seek greater self-reliance in critical industries.
Speaking to ANI, he said, "Everyone is trying to build out all the industry by themselves. I think that is what becomes a lot more obvious in today's world economic scenario as well as the politics. So it's getting not that coordinated, but fragmented."
— ANI
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