The INR to CNY exchange rate is currently bearish, reflecting a downward trend.
Key drivers include the interest rate differential, with China's expected monetary easing contributing to a strengthening of the CNY against the INR. Further, the Indian economy faces pressures, with forecasts suggesting potential depreciation of the INR toward 90 per USD by March 2026. This could negatively affect the INR's value against the CNY as well. Lastly, the recent low inflation rates in China support a stable economic environment, bolstering the yuan further.
In the near term, the INR to CNY exchange rate may trade within a narrow range as it has recently hovered near 90-day lows, suggesting limited volatility ahead.
An upside risk could arise from a favorable US-India trade deal that enhances India's economic position, while a downside risk includes further foreign portfolio outflows from India, which may pressure the INR lower.