Informist Poll
Rupee seen steady at 88.80/$1 Oct-end; RBI may stay on guard
This story was originally published at 18:47 IST on 3 October 2025
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By Pratiksha
MUMBAI – After a weak run last month, the rupee may take a breather and settle broadly unchanged from the current level at the end of October as the Reserve Bank of India is likely to keep the domestic currency from depreciating in the face of sustained foreign portfolio outflows.
According to the median of estimates of 18 respondents from banks, corporates, and brokerages polled by Informist, the Indian unit may settle at 88.80 a dollar by the end of this month, broadly unchanged from the end of September.
The rupee fell 0.7% against the dollar last month, hitting a record low of 88.8025 a dollar, as risk appetite among investors remained dampened owing to uncertainty over a trade deal between India and the US. Fresh tariff announcements and a sharp hike in H-1B visa fee by US President Donald Trump also prompted foreign portfolio investors to pull out funds from the Indian markets. In September, FPIs withdrew $2.13 billion worth of funds from domestic equities.
"Indian rupee will continue to remain under pressure as the uncertainty in reaching a trade agreement between US and India along with FII outflows will continue to weigh on the sentiment," said Gaurav Sharma, associate vice-president and head of research at Globe Capital Market Ltd. "Trade tensions between the US and India have been a major drag on the sentiment of overseas investors towards investment in India."
India and the US have re-started negotiations on a bilateral trade agreement and Commerce Minister Piyush Goyal last month said the first tranche of the deal could be signed by November. The US has slapped an additional 25% punitive tariff on Indian goods, on top of a 25% reciprocal tariff, citing New Delhi's continued purchases of Russian crude oil.
However, the H-1B visa fee hike has led to uncertainty among traders about a breakthrough in India-US trade negotiation anytime soon, and they expect FPI outflows to continue till the time there is any positive development on this front. A median of estimates of 13 respondents sees the rupee appreciating to 88.00 by December-end on expectation that India-US trade deal may materialise by then.
However, most poll respondents expect the central bank to protect the Indian currency from a sharp depreciation. Going by the central bank's active intervention in the spot and offshore non-deliverable forwards market in the last few weeks, they see it preventing the Indian unit from falling past the psychologically-crucial 89-per-dollar mark. Of the 18 poll respondents, only 8 expect the Indian currency to fall below the 89-per-dollar mark this month.
"I don't think RBI is intervening to protect any level. They are letting the rupee to depreciate but not swiftly. They are not letting rupee depreciate significantly and are avoiding a free fall," said Ritesh Bhansali, deputy chief executive officer at Mecklai Financial Services.
Market participants pointed out that the RBI has ample ammunition to spend on keeping the Indian currency in check. India's foreign exchange reserves were at $700.2 billion as of Sept. 26, just shy of the all-time high of $704.89 billion. RBI Governor Sanjay Malhotra said Wednesday that the central bank is keeping a close watch on movement of the rupee and will take appropriate steps, as warranted.
However, some poll respondents expect the central bank to keep only a light touch when intervening in the spot market to support the rupee. They see the central bank stepping in only in case of excessive volatility.
Weakness in the dollar index on growing expectation of more rate cuts by the US Federal Reserve this year may also act as a cushion for the rupee, according to market participants. The US Federal Open Market Committee last month cut interest rate by 25 basis points to 4.00-4.25%, after keeping it unchanged for five consecutive meetings. Fed funds futures traders see a 97.8% probability of the Fed lowering interest rates by 25 bps this month, according to the CME FedWatch tool.
POLL DETAILS
|
Participant |
Oct-end |
Dec-end |
| ANZ Bank India | - | 88.00 |
|
Bank of Baroda |
88.00-89.00 | - |
| CR Forex | 88.00-88.20 | 87.50-88.00 |
| CSB Bank | 88.50 | - |
|
Finrex Treasury Advisors LLP |
89.00 | 87.50 |
| Globe Capital Market | 87.40-89.10 | 86.50-89.80 |
| ICBC | 88.75 | - |
| IDFC FIRST Bank | 89.00 | 88.50-90.00 |
| Karur Vysya Bank | 88.20 | 87.20 |
| Kotak Securities | 89.20 | 87.00 |
| Large engineering company | 88.00 | 86.00 |
| Large state-owned oil company | 88.45-88.75 | - |
|
LKP Securities |
88.75 | 88.00 |
|
Mecklai Financial Services |
89.20 | 88.25 |
| MUFG Bank | - | 88.90 |
|
Nuvama Institutional Equities |
89.25 | - |
| Shinhan Bank India | 88.20-89.50 | 88.10-89.60 |
| South Indian Bank | 88.50-89.25 | - |
| Tamilnad Mercantile Bank | 90.00 | 90.00 |
| YES Bank | 89.30 | - |
|
Median |
88.80 | 88.00 |
End
US$1 = INR 88.77
Edited by Akul Nishant Akhoury
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