Will the Rupee Trade in the 89-90 Range Against the Dollar in December?
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Synopsis
As we enter December, analysts predict the Indian rupee will hover between 89 and 90 per dollar, with the RBI likely maintaining current interest rates. The outcome of US-India trade discussions will play a crucial role in shaping the INR's trajectory. Stay informed with the latest financial insights.
Key Takeaways
- The Indian rupee is expected to trade between 89-90 per dollar in December.
- The RBI is unlikely to cut interest rates this month.
- US-India trade negotiations will heavily influence the rupee's movement.
- November saw the rupee depreciate by 0.8% despite strong domestic GDP growth.
- Crisil has revised India's GDP growth forecast to 7%.
New Delhi, Dec 1 (NationPress) The Indian rupee (INR) is projected to show a weakening trend in the near future, with the USD/INR exchange rate anticipated to fluctuate between 89 and 90 per dollar this month, according to a report released on Monday.
The analysis from Bank of Baroda indicated that advancements in the US-India trade negotiations will be the primary driver for any significant fluctuations in the INR.
On the domestic front, the report suggests that the RBI is unlikely to implement a rate cut during this meeting, noting that the market has already factored in a rate cut by the US Federal Reserve, keeping the dollar within a stable range unless an unexpected decision arises from the Fed.
Both the US Fed decision and the RBI MPC meeting outcomes are not expected to exert considerable influence on the currency, as the interest rate differential is likely to remain intact.
The INR experienced a decline of 0.8 percent in November 2025, closing at 89.46, despite a surprisingly robust GDP report. The report highlighted that the depreciation of the INR is more significant when considering that the dollar itself weakened during the same timeframe.
For the July-September quarter, GDP growth stood at 8.2 percent year-on-year, surpassing 7.8 percent from the prior quarter and exceeding economists’ expectations of 7.5 percent. Meanwhile, GVA growth was recorded at 8.1 percent, while nominal GDP grew by 8.7 percent.
Crisil Limited has revised its forecast for India's GDP growth for the current fiscal year to 7 percent, an increase from its previous estimate of 6.5 percent.
The markets have adjusted their predictions regarding a potential rate cut by the US Fed, with the CME FedWatch now indicating a 90 percent probability of a rate reduction in December.
Point of View
It is essential to remain vigilant about the economic indicators that influence the Indian rupee's performance. As the nation navigates through these financial fluctuations, understanding the broader implications of both domestic and international policies will be vital in making informed decisions.
NationPress
01/12/2025
Frequently Asked Questions
What is the expected trading range for the Indian rupee in December?
The Indian rupee is expected to trade between 89 and 90 per dollar in December.
Will the RBI cut interest rates this month?
The report suggests that the RBI is unlikely to cut rates during this meeting.
What factors could impact the Indian rupee's value?
Progress on the US-India trade deal will be a significant factor influencing the INR's movement.
How did the rupee perform in November?
The INR eased 0.8 percent in November, closing at 89.46.
What is the GDP growth forecast for India?
Crisil Limited has revised India's GDP growth forecast to 7 percent for the current fiscal year.
