Indian Rupee (INR) remains resilient against the greenback despite multiple headwinds. Consequently, the USD/INR pair is really struggling to break above the 83.30 resistance level despite refreshing its all-time high this year.
The constant interventions from the Reserve Bank of India have given the Indian rupee much-needed strength in the past few months. This has also kept the US dollar to Indian rupee exchange rate from rising above 83.30.
Indian Rupee Remains Steady Amid Weak Dollar
Despite the recent drop in the DXY index, the Indian rupee has failed to show any significant strength. While the euro, pound, and yen are rallying against the dollar, the Indian rupee is yet to show a similar trend.
However, despite a decrease in inflation, it remains far above the US Fed’s target of 2%. Therefore, it is highly unlikely to expect the central bank to start cutting the rates anytime soon. As a result, most analysts expect the high interest rates environment to last till at least the mid of 2024.
USD/INR Historical Chart
USD to INR trading dates back to 1973 when the pair was floated in the forex market at an opening price of $1 to 7.98 rupees. By late 1983, the currency pair rose past the psychological level of 10 rupees to the US Dollar. Between then and April 2002, it rallied by 376.41% to 48.76 rupees.
After retracing to 39.9 rupees in November 2007, the USD/INR has been on an uptrend since then. The pair surged to an all-time high of 77.887 rupees in 2022. Before attaining its all-time highs, the USD/INR tasted the 76.45 price mark in March 2020, just as the coronavirus pandemic was sweeping through the world.
As the US Federal Reserve started to hike rates, Indian Rupee started to slide against the US Dollar. In October 2022, the pair surged to a new all-time high of $0.8328. This ATH was refreshed in 2023 but the pair is really struggling to find strength above
USD/INR Outlook Amid Eleated Oil Prices
The global oil prices remain steady due to the rising tensions in the Middle East. The ground invasion of Gaza has further intensified the supply concerns. As Oil is the biggest import of the Indian economy, the elevated oil prices may act as a headwind for the Indian Rupee.
RBI Intervenes To Stabilize USDINR
Since the start of the year, the US Federal Reserve and the Reserve Bank of India (RBI) have both remained hawkish. The increase in interest rates by RBI gave the Indian Rupee much-needed strength in terms of the US dollar. However, in its April 2023 meeting, RBI surprised investors by pausing the rate hikes. This has led to a weakness in Indian Rupee.
Another factor impacting the USD to INR exchange rate is the rising oil prices. Crude oil price has soared to its highest level in the last 10 months. Since oil is one of the biggest imports of India, the country’s import bill has significantly increased. A correction in oil prices may strengthen the Indian rupee against the greenback.
It has also been seen that the Indian central bank starts to intervene whenever the USD/INR pair rises above the 83.3 level. This has kept the exchange rate within a very tight range since the start of 2023. However, the rising strength of the US dollar is still generating strong tailwinds for the pair.
USD/INR Rebounds As Corporates Accumulate USD
After a pullback in USD/INR, there has been an increase in demand for the US dollar by the big corporates and importers of India. The increase in demand is offsetting the slight weakness in the DXY index in the past couple of days. 83 level will remain a key level to watch in the coming weeks.
USD/INR Might Have Formed A Top
The back to back pauses in rate hikes have weakened the US dollar. The recent decrease in inflation has further devalued the dollar in terms of other major currencies. While the effect is yet to reflect in the USD/INR pair, it may soon happen.
This weakness has been caused by the release of the October CPI data which showed that the YoY inflation remained 3.3% in the tenth month of 2023.
It has often been seen in the past 8-12 months that the Reserve Bank of India has started to offer dollars whenever there’s an increased selling pressure on the Indian rupee. This approach has kept INR in a tight range against the dollar.
Due to the current geopolitical scenario, many countries are now exploring more options for international trade. As a result, Indian Rupee has also appeared as a viable option for many countries.
More recently, the Reserve Bank of India has given the go-ahead to the banks of 18 nations to trade in Indian Rupee. The move can increase the demand for INR and decrease the selling pressure.
USD/INR Forecast 2023
You can see how USDINR is finding it hard to clear the supply which lies above the 83.30 resistance level. If the pair gains strength above this crucial level, the USD/INR forecast will become very bullish. However, in that case, the Reserve Bank of India may start to intervene again.
. However, the FOMC statement still put another rate hike on the table before the year-end. The FED also vowed to keep rates high for a long period. This may impact the USD/INR forecast in the coming months.
What will be USD to INR Rate in 2025?
Long Forecast’s USD to INR forecast 2025 suggests the start of the year around 79.79 Rupees. It expects the currency pair to average 80 Rupees by mid-year before rallying further to 86.97 Rupees by the end of the year. The prices can go much higher if the global economy enters a prolonged recession after the ongoing deflationary measures.
It is important to note that the targets for April 2022 have already been met, while the price pattern on the daily chart indicates that there is a high potential for the May 2022 price target of 79.19 to be met in June. As it is, this makes the USD to INR forecast 2025 above quite viable, albeit with some minor differentials. It is crucial to conduct your own individual research.
USD to INR Forecast 2030
A feasible USD to INR forecast for 2030 is informed by the economic health of India and the US, Fed and RBI’s monetary policy, and the demand for the US dollar as a safe haven. Hence, a strong dollar will likely push USD to INR to a new record high, depending on the key drivers.
However, as an emerging market, India’s currency has the potential to strengthen further in the coming years. From that perspective, USD to INR forecast 2030 will be for the pair to remain within a range for several years.
How to trade USDINR
To trade USDINR, one needs to open an account with a reputable forex broker. When researching the best broker, it is helpful to consider their spreads, commissions, and other fees. It is also possible to trade the currency’s derivatives in the form of USDINR futures.