In February 2024, the Indian Rupee (INR) exhibited a marginal increase in strength against the US Dollar (USD). Analysts at MUFG Bank have undertaken a comprehensive analysis of the USD/INR outlook, foreseeing a series of shifts in the exchange rate in the coming months.
For the immediate future in the first quarter of 2024, MUFG Bank anticipates the USD/INR to maintain a level around 83.00. This projection is attributed to the Reserve Bank of India’s (RBI) strategic efforts to rebuild foreign exchange reserves. Subsequently, a more decisive move towards the 82.00 level is anticipated in the second quarter as the US Dollar experiences a weakening trend in the latter half of 2024.
The analysts at MUFG Bank assert their optimistic perspective on the Indian Rupee, foreseeing a tilt in the balance of risks favoring INR strength. Despite the active intervention by the RBI to curb excessive appreciation, they predict the USD/INR to decline to 81.50 by the conclusion of the year.
The forecasted trajectory for USD/INR throughout 2024 is as follows:
Q1 2024: 83.00
Q2 2024: 82.50
Q3 2024: 82.00
Q4 2024: 81.50
MUFG Bank’s insights provide a nuanced understanding of the factors influencing the exchange rate, offering valuable perspectives for investors and stakeholders navigating the dynamic foreign exchange landscape.
