Rupee Faces Slide to 96-97 Per Dollar by FY27 End Amid Outflows
· Business · Economic Times
The Indian rupee could decline to 96-97 per dollar by the end of FY27, driven by persistent capital outflows and elevated global crude oil prices. Reserve Bank of India Deputy Governor Poonam Gupta recently argued that the currency's depreciation since March 2025 could be temporary, suggesting it may have overcorrected by up to 13 percent. However, economists remain skeptical, pointing out that recent balance-of-payments surpluses are largely due to FCNR(B) inflows absorbed by the central bank rather than broad-based capital strength. IDFC First Bank chief economist Gaura Sengupta noted that excluding these specific inflows, the balance of payments was negative in the first half of FY27. Currency markets previously experienced heavy pressure when the rupee touched a record low of 96.96 per dollar in late May, prompting temporary intervention measures from the RBI and the government.
Why it matters
A weakening rupee increases import costs for crude oil and electronic goods, driving domestic inflation and impacting corporate margins across import-dependent sectors in India.
Read the original report — Economic Times
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