Rupee outlook: INR may weaken towards 90 per dollar by March 2026; report flags tariff risks, key technical levels

The Indian Rupee could gradually weaken and move towards the psychological level of 90 per US dollar by March 2026, according to a report by Union Bank of India. The bank said the currency’s trajectory will continue to be shaped by both fundamental and technical factors, with the broader depreciation trend likely to persist over the next year.“By March 2026, fundamentally, we continue to see USD/INR inching towards psychological threshold of $90 levels,” the report stated.On the technical front, the bank noted that the Rupee could strengthen if there are sustained equity inflows into Indian markets or if the India–US trade talks make concrete progress. In that case, the currency may move towards Rs 87.80 per dollar, while Rs 88.30 per dollar would act as a key intermediate support level.On the downside, any weakness in the Rupee is expected to face resistance near Rs 88.80 per dollar, a level where selling pressure tends to intensify. A decisive move beyond this could push the Rupee quickly towards Rs 89.30 per dollar, as per ANI. The report added that geopolitical developments and tariff-related news will remain key in shaping currency sentiment.In the near term, the Rupee is expected to trade in a narrow range with a mild appreciation bias, supported by a consolidating US Dollar Index (DXY) and cautious foreign portfolio flows amid high domestic equity valuations. If the India–US trade deal is finalised, it could trigger $2–3 billion of inflows, the report said.Other supportive factors cited include Brent crude staying below $64 per barrel, the low October CPI print of 0.25 per cent year-on-year, rising expectations of an RBI rate cut in December, and steady domestic SIP flows. The bank also pointed to key upcoming global data — including US retail sales, the trade balance, jobless claims, FOMC minutes, and flash PMIs — as crucial for assessing dollar strength.The Rupee has already touched fresh record lows this year and Union Bank noted that its move towards the Rs 88–89 range aligns with underlying fundamentals.