The recent forecast for the INR to USD exchange rate suggests a period of stabilization for the Indian Rupee (INR) despite reaching a record low against the U.S. Dollar (USD) on September 5, 2025. Analysts indicate that significant pressures are stemming from renewed U.S. tariffs on Indian goods and continuous foreign portfolio outflows, which have reached over $16 billion this year. However, a Reuters poll conducted in early September 2025 predicts that the INR might avoid further sharp declines, estimating an exchange rate of approximately 88.04 by the end of the month, potentially settling around 88.00 over the next year.
The USD has seen fluctuations due to speculation surrounding the Federal Reserve's future interest rate decisions, particularly after recent Federal Reserve rate cuts. The initial loss of USD strength was countered by a significant drop in U.S. jobless claims, which bolstered demand for the greenback. Analysts suggest that the U.S. dollar may continue to be influenced by market expectations regarding the Fed’s policy shifts.
Moreover, developments concerning the Federal Reserve's leadership and upcoming inflation data are also crucial. These elements may affect the Fed's ability to navigate the current U.S. economic landscape, which, in turn, can influence the USD's value. On the technical side, the INR to USD exchange rate stands at 0.011351, which is about 1.2% under its three-month average, indicating relatively stable trading in a range of 3.4% over this period.
In summary, while the INR is under pressure from external tariff concerns and outflows, forecasts suggest a possible stabilization in the near term, influenced mainly by U.S. economic indicators and Federal Reserve policy developments.
