Rupee may end the year near current levels, says BofA

The Indian rupee could end the year close to its current levels, with much of its recent depreciation already behind it, according to Bank of America (BofA).

Speaking in an interview, Amish Shah, head of India research at BofA, said the bank’s internal foreign exchange view sees the rupee ending the year around 93 per US dollar, broadly in line with prevailing levels.

He noted that a significant portion of the rupee’s depreciation has already played out. Unless there is a major escalation in geopolitical risks, particularly further damage to global energy infrastructure, the downside pressure on the currency is expected to be limited.

The relatively stable outlook is also supported by proactive measures from the Reserve Bank of India (RBI), which has helped ease volatility in recent sessions.

Shah added that concerns around rupee depreciation had earlier weighed on foreign investor returns. However, with expectations that currency weakness may stabilise, investor comfort toward India could improve.

“A large part of the rupee depreciation story is now coming to an end,” he said.

That said, the trajectory of crude oil prices remains a key variable for the currency, given its impact on India’s fiscal balance, inflation, and current account dynamics.

Meanwhile, the rupee gained 33 paise to 92.85 against the US dollar in early trade on Monday (April 6), following RBI's tightened rules to curb speculative positions, capping banks’ net open positions at $100 million, even as global developments continued to act as a risk.

Forex traders said the domestic unit continued to reel under pressure due to unabated withdrawal of foreign capital, a strengthening dollar, and rising crude oil prices amid a volatile geopolitical situation.