New Delhi: The Indian rupee is expected to trade in a range of 95.30 to 96.80 against the dollar in October, with strong foreign exchange reserves providing support even as rising global bond yields and foreign investor outflows weigh on the currency, according to a report by Union Bank of India.
The lender expects the rupee to "trade sideways" this month, balancing competing pressures on both sides of the ledger.
What supports the rupee
The report notes that robust forex reserves, trade agreements and a cooling of oil prices back towards $100 levels will help the currency. Strong inflows under the Reserve Bank of India's FCNR(B) deposit scheme pushed foreign exchange reserves to an all-time high of $785.71 billion, helping the rupee strengthen to 94.26 against the dollar in the first week of September.
Overall reserves stood at $765.9 billion, covering about 11.2 months of goods imports — a comfortable buffer.
What weighs on it
September was volatile for the rupee with a slight depreciation bias. Dollar strength after the US Federal Reserve raised rates, combined with crude oil prices climbing from around $90 to $110 a barrel in the first fortnight of September, worried the foreign exchange market about India's balance of payments. The rupee ended September at 95.83 per dollar.
Foreign portfolio investor outflows were another drag: FPIs withdrew a net $5.9 billion from Indian equities and bonds in September — $3.8 billion from equities alone — reversing the $7 billion they pumped in during July and August. So far in FY27, foreign investors have pulled out more than $21 billion from Indian markets.
The bank also expects a 25 basis-point RBI rate hike in October 2026, followed by one or two more hikes during the remainder of FY27.
Sources:
Punjab Kesari: Rupee seen at 95.30-96.80 in October; global yields, FPI outflows pose risk: Report (ANI)
The lender expects the rupee to "trade sideways" this month, balancing competing pressures on both sides of the ledger.
What supports the rupee
The report notes that robust forex reserves, trade agreements and a cooling of oil prices back towards $100 levels will help the currency. Strong inflows under the Reserve Bank of India's FCNR(B) deposit scheme pushed foreign exchange reserves to an all-time high of $785.71 billion, helping the rupee strengthen to 94.26 against the dollar in the first week of September.
Overall reserves stood at $765.9 billion, covering about 11.2 months of goods imports — a comfortable buffer.
What weighs on it
September was volatile for the rupee with a slight depreciation bias. Dollar strength after the US Federal Reserve raised rates, combined with crude oil prices climbing from around $90 to $110 a barrel in the first fortnight of September, worried the foreign exchange market about India's balance of payments. The rupee ended September at 95.83 per dollar.
Foreign portfolio investor outflows were another drag: FPIs withdrew a net $5.9 billion from Indian equities and bonds in September — $3.8 billion from equities alone — reversing the $7 billion they pumped in during July and August. So far in FY27, foreign investors have pulled out more than $21 billion from Indian markets.
The bank also expects a 25 basis-point RBI rate hike in October 2026, followed by one or two more hikes during the remainder of FY27.
Sources:
Punjab Kesari: Rupee seen at 95.30-96.80 in October; global yields, FPI outflows pose risk: Report (ANI)
