Article Hero

USD to INR Forecast 2024 and Beyond: RBI maintaining stability at 83

Cristian Cochintu
Cristian Cochintu
01 November 2023

The US Dollar is expected to grow stronger in relation to the Indian Rupee in 2024, though the latest USD to INR forecast is pointing towards new all-time highs in the coming months. 

The RBI has continued to maintain the INR at about 83 to the USD, though against relentless USD pressure, there is a bit of upwards drift appearing now, and there may be a chance of an upside break if the USD does not turn before too long. Reserve Bank of India (RBI) has provided support for the Indian Rupee for several sessions, with recent days witnessing an aggressive level of intervention, as the Middle East tension has fuelled the safe-haven flows, which benefit the US Dollar.

The two main drivers for the INR, the policy rate differential and inflation differentials have not changed substantially, though Indian inflation is now headed lower in contrast to US headline inflation, and so that may help support the INR near term. A strong Dollar due to the Fed hiking the interest rates to curb inflation in the country was counterbalanced by India’s economy outperforming many of its peers in 2023. RBI forecasts India's Gross Domestic Product (GDP) will grow at 6.5% in the current fiscal year and will continue focusing on maintaining inflation at the 4% target.

Here we look in more detail at what has been driving the rupee price and where it may go next, including the latest USD to INR forecast for 2024, 2025, and 2030. 

USD to INR Forecast – Summary

  • USD to INR Forecast Q4 2023: With RBI maintaining stability and local economy bucking the global slowdown trend, the USD to INR is forecast to hold the 83.2 resistance level at least until the end of the year.
  • USD to INR Forecast 2024: Analysts does not expect the RBI to embark on any easing until 2024 and forecast the USD to INR exchange rate to fluctuate within the 82-84 range and continue the actual bullish trend.
  • USD to INR Forecast 2025-2030: While some algorithm-based currency pair forecasts USD to INR remain within a range for several years, other are pointing towards an INR strength to 90 by 2025 and 100 by 2030. 

With you can trade USD/INR with tight spreads starting at 0.90 pips and 1:20 leverage.


USD to INR Forecast – Fundamental Outlook: Why India is bucking the global slowdown trend

In 2023, India will have the fastest-growing major economy. While other countries in the region seem to be struggling, India seems to be doing well. Even though the Indian rupee is one of the strongest in the region, inflation is still high but is predicted to drop much more in the upcoming year as Indian government bonds are set to be included in international indexes.  

Economic growth - firming, not stalling

India saw a noteworthy increase in its year-over-year growth rate from 6.1% in the first quarter to 7.8% in the second quarter. Among the world's leading economies, India's economy is now expanding at the quickest rate; growth is expected to surpass 7% this year.    

While the rest of the Asia Pacific region is generally witnessing weaker growth, India is seeing significant economic growth. The primary causes of this are the recent downturn in both China and the West, as well as the deterioration in the global semiconductor industry, which is a major driver of growth for many regional economies.  

The primary engine of growth is capital investment, which is fuelled by domestic demand. Investment is anticipated to increase India's capacity for non-inflationary growth, which is encouraging for the future prosperity of the country. Even though net exports aren't contributing much, weaker imports have somewhat countered declining exports.  

There are several reasons for the strong performance of household expenditure, including the strengthening labour market, declining unemployment, increased labour force participation, and declining inflation rates. Government spending, while not the cause of growth, does, as we will see in a moment, indirectly encourage it. Spending that is specifically targeted does this. 

Budget deficit reduction is mindful of growth

The Union budget for this year included what some have called a "unambitious" goal: bringing the deficit down from 6.4% of GDP in the fiscal year ending in March 2023 to 5.9% of GDP.    

This budget is more appropriately characterised as "growth-oriented," with a number of capital spending initiatives aimed at strengthening India's infrastructure and the purported objective of "crowding in" private sector spending. Based on its performance so far this year, the GDP appears to be performing well in that area.  

India's sovereign credit rating is BBB, just below investment grade, meaning that a downgrade might potentially affect the bond market. Those fears appear to have subsided with the announcement that Indian government bonds will soon be included in foreign bond benchmarks.    

In the context of India's efforts to progressively lower the deficit and its debt-to-GDP ratio, it appears that this year will proceed much according to plan, if not a little bit earlier.    

Assuming real GDP growth of approximately 7% and average inflation of approximately 4%, as projected by ING, India's cumulative deficit needs to reach approximately INR 16.9 trillion by March of the following year to meet the 5.9% deficit ratio. Even though the debt-to-GDP ratio is still high and is predicted to moderate to roughly 81.5% by the end of this fiscal year, down from 83.8% last year, there doesn't seem to be much risk of any credit downgrades, as the monthly deficit figures have so far remained close to the projected “on target” track required to achieve this.

External balance and the INR

The rupee's resilience has been one of the year's biggest surprises. The INR's only moves versus the USD since October 2022 have been in the range of 80.5 to 83.0. Over the last two months, the range has been getting closer to 82.5. When compared to other competitors in the foreign exchange market, such the Chinese yuan, which is 5.84% lower against the USD, and the Japanese yen, which is 11% poorer against the USD, the INR is currently the third best-performing currency in the APAC region year to date. This is a notable outperformance. 

Stable INR thanks to the RBI

The favourable spread of policy rates over US rates is undoubtedly beneficial, even though India's economy has outperformed many of its peers. However, we do not fully attribute this FX performance to structural problems. Rather, we believe that the Reserve Bank of India's (RBI) intervention has been the primary cause of the currency's year-round stability. To preserve a comparatively steady actual exchange rate, the INR regularly tracks changes in inflation.    

This year, Indian inflation has occasionally been lower than US inflation, possibly due to a stronger rupee. Except for a brief interval a few months ago, Indian inflation has surged recently. US inflation has stabilised at just above 3% in the interim, raising concerns about the stability of the INR.  

Considering this, the RBI appears to have a lot of options if it chooses to continue supporting the INR. Not only has import cover risen recently, but it is still much higher than the six months that are commonly considered to be the bare minimum for developing countries.   

The trade balance has deteriorated

The trade sector, which is presently experiencing a deficit (although a minor one by historical standards; the current account deficit is only about 2% of GDP), has nothing to do with this strong FX reserves position.  

India's exports have declined since their peak in 2021, much like everything else in the area, but the drop has been quite slow, and India may have profited from two things. First off, compared to most of the rest of Asia, direct trade between India and China is significantly more restricted. The other is that, while being particularly hard struck this year and just now beginning to recover, India continues to play a relatively small role in the semiconductor industry.  

However, India does badly overall and has one of the lowest relative annual growth rates when it comes to exports to the rest of the region. There seem to be two main factors that affect this. First off, this year's exports of jewellery, which are typically robust, have been extremely slow. This made up a large portion of India's export portfolio in 2022—nearly 8.5% of all exports. Since China is one of the biggest markets for Indian jewellery after the US, where demand has also been adversely affected by rising inflation rates, this is one sector where delayed Chinese demand may be having an overwhelming impact.  

Limitations on agricultural items' exports are the second. Exports of rice that wasn't basmati were banned on July 20. This happened the year before when eating broken white rice was outlawed. The export decline will be made worse by sugar exports when the current export season ends on September 30. This is due to the limitation on sugar exports to 6.1 million tonnes this season. Exports of sugar have already essentially ceased.     

Government bonds being added to international indices to offer further support

The bulk of India's financial account inflow is comprised of the category "other investment" in addition to a steady stream of foreign direct investment. This category demonstrates that foreign exchange profits from overseas stock listings have been a reliable source of income over the last 18 months. It is mostly composed of American and global deposit receipts (ADRs and GDRs).    

Portfolio flows have shown the anticipated rise in volatility; nonetheless, direct and "other" investments should be rather stable. This provides solace when the trade picture appears vulnerable, and a currency is arbitrarily withheld from the point at which the market would want to see it for some time.    

Future inflows into portfolios may be encouraged by JP Morgan's recent announcement that it will start indexing Indian government bonds in its Emerging Market Bond Index on June 28, 2023. This transfer has been eagerly anticipated after being repeatedly delayed in previous years. Though estimates vary, it is believed that this will draw significant foreign capital inflows into Indian government bonds; it is estimated that these inflows will amount to between $25 and $40 billion.  

It remains to be seen if JP Morgan's example will inspire other businesses, such as the FTSE Russell. In any case, the move should help cut corporate bond rates and the gap between US Treasuries and government bonds, in addition to strengthening the INR.    

However, given that US inflation is predicted to decline over the coming year and Indian inflation is predicted to stabilise at a level between 4.5% and 5.5%, analysts believe that the INR will eventually resume its trend of nominal depreciation at a rate of about 2% annually in line with maintaining a stable real exchange rate. This will come after the short-term benefit from a shift in the market's estimate of future interest rate easing by the US Federal Reserve in 2024 and 2025.  

Because the currency is now only sustained in a small range and has not experienced the same level of depreciation as other regional currencies, analysts forecast USD to INR with more downside potential (INR appreciation) when the USD finally does become weaker than some other currencies. They anticipate that the Australian dollar and Korean won will do better if this flip ever happens. 

Euro to Dollar Forecast 2024Pound to Dollar Forecast 2024Turkish Lira Forecast 2024

Inflation and the Reserve Bank of India 

Before the year concluded, Indian inflation appeared to be between the RBI's target range of 2 and 6%, suggesting that policy rates might be loosened. However, unpredictable monsoons have severely harmed agriculture, driving up the cost of seasonal goods. As a result, although inflation is starting to decline, it has risen above the RBI's target once more.  

Analysts forecast that inflation will continue to decline in the second half of the year as the government protects people from rising energy prices. The statistics for October will be made public, and as early as the following month, inflation may return to within the target range.  

This will maintain real rates at high levels and offer compelling arguments in favour of a rate cut in the first half of 2024. The fact that India's policy rate, at 6.5%, is 100 basis points less than the US rate helps the INR. Compared to some of its Asian contemporaries, that spread is greater. The US economy's continued defiance of logic in failing to slow down poses the biggest risk to the projection of US rates and the durability of the USD's strength. For this reason, the latest SAR to INR projection is a tad overly optimistic.      

USD to INR Forecast – The Latest Calls for Central Banks

Central bank rates are reaching their peak globally, and we're already starting to see rate cuts in certain regions. Here's what investment banks expect from policymakers from US and India over the next few months.

Federal Reserve

  • Expectations: No further rate hikes with cuts starting from Spring 2024
  • Rationale: A second rate hike this year is still likely, according to the Federal Reserve, which points to the high rate of inflation, tight labour markets, and unexpectedly strong economic growth. However, when real household discretionary income begins to stagnate in tandem with the commencement of student debt repayments, the lending market becomes more restrictive, and many people's financial reserves are depleted, then things will only get worse. Thankfully, significant inflation indicators are starting to decline. For instance, the core personal consumption expenditure deflator has seen less than 0.2% month-over-month prints for three consecutive months. This pattern implies that when the economy slows down in 2024, the Fed will be prepared to act quickly.  
  • Risk: Long-term inflation may remain high due to a tight employment market and persistently high US consumer spending. This is particularly true if unions can bargain wage agreements that surpass inflation and establish the benchmark for higher pay scales. In this case, it is unlikely that the Fed will hold off on raising rates further. Alternatively, lending criteria will become much stricter, and the Fed may be forced to decrease interest rates more aggressively if the financial crisis reemerges in the banking sector, most likely through the commercial real estate market.  

Reserve Bank of India

  • Expectations: No further changes to the repo rate this year. Rate cuts start in the first quarter of 2024.
  • Rationale: When compared to the US Federal Reserve funds rate and its own internal inflation rate, which is currently falling after a few recent spikes in food prices, the Reserve Bank of India (RBI) has one of the strongest policy rates in the region. The RBI is probably being prevented from easing earlier by strong macro momentum, as seen by the GDP expanding at one of the fastest rates in the world in the second quarter of this year—7.8%—and by its apparent ability to keep the INR stable at about 83 to the USD and 22.133 to the SAR. 
  • Risk: There is room for the RBI to move earlier than we are suggesting, but they may prefer to wait for the US to start easing before they move themselves.

USD to INR Forecast – Technical Outlook: Loses Momentum Above the Key Support Level

The USD to INR upward bias remains intact as the pair holds above the key 100- and 200-day Exponential Moving Averages (EMA) on the daily chart.  


The immediate upside barrier to watch is seen at 83.30 (high of October 4). Further north, the all-time high around 83.45 will be the next resistance, followed by a psychological round mark at 84.00. On the downside, a breach of the 83.00 mark could drag the pair towards 82.82 (low of September 12), en route to 82.65 (low of August 4).

From a technical perspective, the USD to INR forecast points toward a more likely break of the tight consolidation to new all-time highs in 2024. 

USD to INR Forecast – Institutional and AI-Algorithms Price Predictions 2024, 2025, 2030

Below is the updated data of the USD to INR forecasts as of February 2024. It either can be altered or can be proved to be wrong as it is based on essential factors like interest rates and central bank policy, in line with market assumptions. It is important to research and analyze keeping in mind that past displays do not assure future outcomes.

USD to INR Forecast by CareEdge Ratings: RBI to Keep Rupee Range Bound against the Dollar  

As crude oil prices are expected to stay elevated in the near term, CareEdge revised their projections for India’s current account deficit (CAD) by 20bps to 1.8% of GDP in FY24 from 1.6% projected earlier. This is still lower than CAD of 2% in FY23.  

Their projection assumes the Indian crude oil basket would average USD 87 per barrel in FY24 versus USD 85 per barrel assumed earlier. India’s net foreign direct investment (FDI) inflows have fallen to ~USD 5 billion in Q1FY24 from ~USD 13.4 billion in Q1FY23.

They expect FDI flows to moderate in FY24, as businesses delay investments amidst a global slowdown. Elevated UST yields and a strong Dollar Index are weighing on foreign portfolio investments (FPI). India’s net FPI inflows fell to USD 2.2 billion in August from USD 5.8 billion in July and a peak of USD 6.9 billion in June.  

September has seen net FPI outflows of USD 0.5 billion so far. We expect FPI flows to gain momentum once the Fed signals that interest rates have peaked. They maintain the initial view that India will witness net FPI inflows in FY24 as UST yields moderate eventually and as India benefits from favorable growth differentials arising from being the fastest-growing major economy.

In the last two MPC meetings, RBI has emphasized its commitment to bring inflation to its 4% target. Hence, we expect RBI to intervene to contain rupee volatility and imported inflation. India has adequate forex reserves, equivalent to an import cover of ~11 months, to support RBI intervention. Further, RBI’s forward book position looks comfortable at net purchases of USD 19.5 billion as of July 2023.  

Elevated UST yields, weak yuan, and crude oil prices are expected to weigh on the rupee in the near term. Thereafter, some moderation in UST yields and crude oil prices should offer support.

In the coming second half of the fiscal year 2023-24, they forecast USD to INR exchange rate to fluctuate within the range of 82 to 84, gradually gravitating toward the lower boundary of this range. This projection marks a shift from their previous forecast of 81 to 83.

Though, the agency forecast SAR to INR to trade within the 21.866-22.40 range and forecast AED to INR to trade within the 22.325-22.87 range within the next 6 month.

AED to INR Forecast 2024, 2025, 2030SAR to INR Forecast 2024, 2025, 2030

USD to INR Forecast by ING

Analysts forecast USD to INR has some downside potential (INR appreciation) when the USD finally does turn weaker is more limited than some other currencies, as the currency is currently only supported in a narrow range and has not seen the same level of depreciation as other regional currencies.

USD to INR Forecast by ING
USD to INR Forecast - Source: ING

AED to INR Forecast by Trading Economics

Trading Economics forecast USD to INR to be priced at 83.79 by the end of 2023 and at 85.38 in one year, according to its global macro models projections and analysts' expectations. 

USD to INR Forecast by Wallet Investor

Wallet Investor forecast USD to INR to close 2023 at 83.693 and expects a Rupee appreciation during the next year. 

USD to INR Forecast 2025
USD to INR Forecast, Long-Term Rate Predictions for Next Months and Year: 2023, 2024 – Source: WalletInvestor

The 2024 USD to INR price prediction towards an all-time high of 87.054, and a closing rate of 86.987. The 2025 USD to INR forecast is showing a potential maximum rate of 90.311 and a closing rate of 90.234. The USD to INR forecast for the next 5 years is bullish, with the AI algorithm predicting a new all-time high of 99.496.

USD to INR Forecast 2025 by AI Pickup

The Artificial Intelligence (AI) Pickup algorithm supports the statement that the strength of the prevailing trend and the live inflationary climate will continue to weaken the rupee in a long-term forecast until 2027. The AI algorithms USD to INR forecast 2025 points towards an advance up to 89.1.

Summary of USD to INR Forecast

  • The Indian Rupee has recently breached the 83-level against the US Dollar, but its decline has been curtailed by interventions by the Reserve Bank of India (RBI) across various markets, including the spot, Non-Deliverable Forward (NDF), and futures markets.  
  • In the coming second half of the fiscal year 2023-24, most institutions and AI-algorithms forecast the USD to INR exchange rate to fluctuate within the range of 82 to 84, gradually gravitating toward the lower boundary of this range.  


FAQs about USD to INR forecast






Cristian Cochintu
Cristian Cochintu

Cristian Cochintu writes about trading and investing for Cristian has more than 15 years of brokerage, freelance, and in-house experience writing for financial institutions and coaching financial writers.