Rupee expected to further weaken vs dollar in coming months

The rupee is expected to further weaken in the coming months as Trump's presidency strengthens the dollar, at least in the near term, experts said, adding that the central bank's interventions in the currency market are likely to ease.

- Shayan Ghosh

In 2024, the local currency lost 2.9%, but the depreciation was lower than some of the other Asian currencies. According to Bloomberg data, the yuan lost 3% during the same period.

Experts said the lower depreciation so far when compared to other currencies is also a reason why there is room for more correction. While some see the rupee touching the 87-levels in the next three to four months, others see it holding its own after 86.2. On Thursday, it closed at 85.75.

"There is a pending depreciation pressure visible on the rupee and that is seen in the REER overvaluation of around 8%," said Kanika Pasricha, chief economic advisor, Union Bank of India. "...we have depreciated in the recent dollar index spike relatively less compared to our trade partners."