New Delhi: The Indian rupee (INR) is likely to trade with a depreciating bias in the near term, with the USD/INR pair expected to remain in the 89–90 per dollar range through December, according to a Bank of Baroda report released on Monday.
The bank noted that progress on a US–India trade deal will be the key catalyst for any sharp appreciation or depreciation of the rupee.
On the domestic front, the report said the Reserve Bank of India (RBI) is not expected to cut interest rates in its upcoming policy meeting. It added that a widely anticipated rate cut by the US Federal Reserve has already been priced in by markets. As a result, the US dollar is likely to stay range-bound unless the Fed delivers an unexpected move.
Bank of Baroda stated that neither the US Fed’s decision nor the RBI’s Monetary Policy Committee outcome is likely to significantly impact the currency, as the interest-rate differential between the two countries will remain intact.
The rupee weakened 0.8 per cent in November 2025, closing at 89.46 per dollar, despite India posting a stronger-than-expected GDP print. The bank noted that the rupee’s softening was notable considering the US dollar weakened during the same period.
India’s GDP growth for the July–September quarter came in at 8.2 per cent year-on-year, up from 7.8 per cent in the previous quarter and above economists’ expectations of 7.5 per cent.
- GVA growth: 8.1%
- Nominal GDP growth: 8.7%
Rating agency Crisil has revised India’s GDP growth forecast for the current fiscal year to 7 per cent, up from its earlier estimate of 6.5 per cent.
Meanwhile, market expectations for a US Fed rate cut have strengthened, with the CME FedWatch Tool placing the probability of a December rate cut at around 90 per cent.
With inputs from IANS