**Market Brief: Rupee Outlook & Currency Trends** **Current Market Status** The Indian Rupee (INR) remains under significant strain, recently hitting record lows around **91.62–91.74** per US Dollar. Market pressure is pushing the currency toward the psychological **92** mark, driven by persistent foreign portfolio outflows and a widening Current Account Deficit (CAD). Data indicates foreign investors have pulled approximately **$2.7 billion** year-to-date, following nearly **$19 billion** in outflows last year. **Expert Projections** Abhishek Goenka of IFA Global forecasts continued near-term volatility, citing weak capital inflows and hesitation among exporters to sell dollars. However, the medium-term outlook for FY27 appears constructive. The rupee is expected to average below **90** in the next fiscal year, supported by favorable valuations—currently estimated to be **5%** undervalued—and potential triggers from new trade agreements. **Central Bank Strategy** The Reserve Bank of India (RBI) is actively managing volatility through selective intervention. The central bank has reportedly sold nearly **$45 billion** since October to curb sharp depreciation. To balance liquidity needs without choking the system, the RBI is utilizing foreign exchange swaps alongside spot market sales. This approach reflects a strategic choice to tolerate moderate weakness to preserve domestic liquidity and support growth. **Key Drivers & Risks** * **Exporter Dynamics:** While a weaker rupee offers partial margin relief to export-oriented sectors, order visibility remains low, limiting immediate dollar supply. * **Global Headwinds:** Geopolitical uncertainties and tariff-related risks continue to weigh on emerging market currencies. * **Valuation Support:** Forward premiums suggest one-year levels near **94.50–95.00**, indicating significant room for appreciation once external pressures stabilize.