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Rupee to reverse course this decade

The Indian rupee has continued its long-run trend of depreciation against the US dollar this year, taking it to a record low of 80/$. It may still weaken further in the near term. However, there are reasons to think that that the rupee will reverse course within the next decade and appreciate against the dollar on a sustained basis. We think decent productivity growth, an improvement in India’s terms of trade and a narrowing inflation differential will mean the rupee strengthens back to around 70/$ by 2030.


In view of the wider interest, we are also sending this India Economics Focus to clients of our FX Markets Service.

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