Indian Rupee Hits Record Low, But Recovery Expected in 2026
Rupee slides to historic low amid foreign outflows, but analysts predict gradual recovery by mid-2026 if trade deal progress occurs.
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A slight recovery of the Indian rupee against the dollar is anticipated within the next three months; however, the continuation of the turnaround cycle is directly related to the U.S.-India trade negotiations' yield.
The currency market has been severely affected by the U.S.-India trade tension, as a 50% tariff on Indian exports by the U.S. resulted in the withdrawal of $17 billion from Indian stocks by foreign investors. The Indian rupee reached a historic low of 90.29 per dollar in November, despite the Reserve Bank of India’s intervention and an impressive GDP growth of 8.2% in the July-September quarter, representing a total decline of almost 5% for the year.
Experts are of the opinion that the rupee will find itself within a very narrow band in the short term as a result of the cautious foreign investment and RBI management. A survey carried out by Reuters among 37 forex analysts found that the rupee might rise to 88.91 per dollar in February 2026 and further to 88.83 in May.
The currency is expected to be stronger by around 0.3% over the next year and will therefore be trading at about 89.65 per dollar. The evolution of the rupee’s value will depend primarily on the mood of the investors and the degree of trade talks between the U.S. and India.
