The Reserve Bank of India (RBI) is expected to intervene to contain sharp volatility in the currency market after the rupee slipped below the 88 mark against the US dollar. According to a CareEdge Ratings report, the central bank’s healthy reserves and favourable global trends provide it with room to act if required.

Forecast range intact despite pressure

CareEdge has maintained its FY26-end forecast for the rupee at 85–87 to the dollar, supported by a softer greenback, a firmer yuan, India's manageable current account deficit, and the potential of a US–India trade deal. The agency highlighted that India's foreign exchange reserves, at around USD 703 billion, remain close to record highs, giving the RBI ample capacity to smoothen currency fluctuations.

Outflows weigh on near-term sentim

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