India's central bank, the Reserve Bank of India (RBI), announced new measures aimed at curbing speculative activity in the rupee and stabilizing the currency amid ongoing depreciation pressures. On Saturday, the RBI restricted the rebooking of cancelled foreign exchange derivative contracts and created a special window to meet the daily dollar requirements of three public sector oil marketing companies, thereby ring-fencing their trades from the spot market [1]. These steps are intended to make it more expensive to take speculative bets against the rupee and to provide short-term relief to the currency.
Despite these interventions, strategists and analysts expect the rupee to continue weakening due to persistent fundamental pressures such as elevated oil prices, a widening current account deficit, and challenging global capital flows. The rupee recently recovered from 96.79 per dollar to the 95-level following the RBI's actions, but is forecasted to slide further. S&P Global Market Intelligence projects the rupee to trade around 97 per US dollar by the end of 2026 and 98 by mid-2027 [1]. Similarly, Mizuho Securities anticipates the rupee will reach 98 per dollar by late 2026 or early next year [1]. Some strategists do not rule out the possibility of the rupee hitting the 100-per-dollar mark by 2027 [1].
RBI Governor Sanjay Malhotra emphasized the central bank's commitment to ensuring orderly movement in the foreign exchange market, stating, "The RBI is determined to do whatever is necessary to ensure orderly movement in the foreign exchange market" [1]. However, Devarsh Vakil of HDFC Securities noted that the RBI's recent steps offer only "short-term to medium-term stability, not long-term structural support" [1].
Earlier in the year, the RBI launched the Foreign Currency Non-Resident (Bank) deposits (FCNR-B) scheme, which incentivized non-resident Indians to make foreign currency deposits in Indian banks. This program boosted the RBI's foreign exchange reserves by $105 billion, but after its closure on August 30, the rupee fell 1.9% against the dollar, prompting further aggressive intervention by the central bank [1].
CONCLUSION
The RBI's latest measures have provided temporary support for the rupee, but analysts expect continued depreciation due to persistent macroeconomic pressures. Market participants are bracing for the possibility of the rupee reaching 100 per dollar by 2027, highlighting the limitations of short-term interventions in addressing long-term structural challenges.