Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, on Wednesday stated that with crude oil prices remaining elevated, the rupee is likely to face continued depreciation pressures.
Indian rupee is expected to depreciate by around 2 per cent to the 92 level against the US dollar by the end of 2026, despite the short -term relief rally following the announcement of the US-India trade deal on January 3, according to a report by UBS.
India's household gold stockpile, which is estimated at around 25,000 tonnes, has quietly emerged as one of the country's most important macroeconomic shock absorbers, offering support to currency stability, financial resilience, and consumption at a time of global uncertainty.
Capital flows could also turn more favourable. Potential inclusion of Indian government bonds in global bond indices, stabilisation in corporate earnings, and the likelihood of renewed FPI equity inflows may ease pressure on the rupee.
Sensex suffered loss of 0.63% at 84,679.86, while the Nifty 50 down by 0.64% at 25,860.10. Among the sectors, Nifty Realty emerged as the top laggard. Others including Nifty Bank, Nifty Oil & Gas, and Nifty Pharma all closed lower while on the upside was Nifty Consumer Durables index.
The Indian rupee touched a historic low on Tuesday, breaching the 91-mark against the US dollar for the first time. The sharp fall highlights growing pressure on the domestic currency amid continued foreign fund outflows and weak capital inflows.
Global credit rating agency Fitch Ratings on Thursday flagged that failure to sufficiently hedge foreign-exchange (FX) exposure could exert pressure on credit ratings for certain Indian corporates, particularly those with significant vulnerability to rupee depreciation.
Indian markets, both equities and commodities, are signalling optimism despite global uncertainty, Kotak Securities' 2026 Market Outlook said Wednesday, as it delved into macro trends, sector opportunities and commodity forecasts investors should track in the year ahead.
India's foreign exchange reserves declined by USD 1.877 billion in the week that ended November 28 to USD 686.227 billion, according to the latest weekly data released by the Reserve Bank of India (RBI).
Reserve Bank of India Governor Sanjay Malhotra on Friday said the central bank will study the pros and cons of the markets regulator Securities and Exchange Board of India's (SEBI) proposal that observed that the banks be allowed to foray into non-agricultural derivatives.
The recent depreciation in the Indian Rupee is unlikely to have any significant impact on CPI inflation in the country, as India has a low dependence on imports for food products, highlighted a report by Bank of Baroda.