Abhishek Sinha
Mumbai, 10 November 2025 – The Indian rupee remains locked in a narrow range as global and domestic factors converge to shape its near-term outlook. The USD/INR pair is currently trading around ₹88.67 per US dollar. Reuters+2Trading Economics+2
Waiting on Trade & Flows
The currency’s relative stability comes at a time when markets are keenly watching developments in the proposed India-US trade deal and persistent equity outflows.
As Anindya Banerjee, Head of Currency & Commodity Research at Kotak Securities, put it:
“The USDINR pair remains range-bound near its all-time highs, currently around 88.65, as markets await clarity on the proposed India–US trade deal and a resolution to the ongoing trade tensions. Foreign portfolio investors have sold over a billion dollars so far in November, lending support to the pair. In the near term, the Rupee is expected to trade within a broad 87.50–89.50 range, with movements in the dollar index and U.S. yields remaining key catalysts. Expectations of an end to the U.S. government shutdown could inject fresh liquidity into the system, improve economic sentiment, and push U.S. yields higher — factors that may keep USDINR supported.”
Why ₹88.67 Matters
- At today’s level, the rupee is hovering just below its record lows (around ₹88.80-89.00). Reuters+1
- Persistent foreign equity outflows—over $1.5 billion in November alone—are weighing on the currency. Reuters+1
- Global dynamics: A stronger U.S. dollar and rising U.S. yields can exert further downward pressure on INR.
What to Watch
- India-US trade deal: Any breakthrough could boost sentiment, aid exports and head off further rupee weakness.
- US yields & dollar index: A recovery in US Treasury yields or higher dollar strength could drag the rupee back towards the ₹89.50 mark.
- Domestic flows & RBI action: The Reserve Bank of India (RBI) has been intervening to manage peaks near ₹88.80-₹89.00. Reuters+1
Outlook: 87.50-89.50 Range Likely
Analysts broadly agree with Banerjee’s view: the rupee is likely to trade within ₹87.50 to ₹89.50 in the near term. A move below ₹87.50 would require strong positive triggers (trade deal progress, robust capital inflows) while a sustained breach above ₹89.50 could suggest broader risk-off dynamics or a surge in dollar strength.
Implications for Stakeholders
- Importers: Higher USD/INR means greater input costs — hedging becomes more important.
- Exporters: A stable rupee helps competitiveness, but further depreciation could benefit margin.
- Investors: Currency risk remains potent – portfolio inflows/outflows will remain a key driver.
Bottom line: At around ₹88.67, the rupee is at a delicate juncture. While the India-US trade outlook and global yield dynamics offer upside potential, the backdrop of heavy equity outflows and persistent dollar strength means the currency’s headroom is limited. Unless a strong catalyst emerges, ₹88.00-₹89.50 may well be the default oscillation zone.
