New Delhi: According to a report from Bank of Baroda, the Indian rupee is expected to trade between 85. 25 and 86. 25 against the US dollar in the near term.
The report also cautioned that increasing geopolitical tensions and possible modifications to US tariffs posed dangers to the rupee's stability.
It stated that the INR is expected to trade between 85. 25 and 86. 25/USD in the near term. There are dangers associated with a major escalation of geopolitical tensions.
According to the study, the rupee has fallen by 0. 6% in June 2025 so far, following a 1. 3% decrease in May 2025. Much of the pressure on the rupee occurred in the second week of June, particularly after rumors of a battle between Israel and Iran.
Previously, the rupee was fluctuating within a narrow range of 85. 39 to 85. 63 from June 2 to June 12. However, following reports of Israel's assault on Iran, the rupee dropped significantly, falling 0. 6 percent on June 13.
This was the rupee's largest one-day decline in a month. Since then, the rupee has stabilized, but it is still trading above the 86-per-dollar level.
The study also mentioned that global currencies increased in June 2025, largely due to a decline in the US dollar. The dollar index (DXY) fell 1. 3%.
This occurred as US economic statistics, such as inflation and labour market reports, revealed that price pressures in the economy remained under control. However, the labour market statistics revealed inconsistent trends.
Due to these considerations, investors anticipate that the US Federal Reserve would lower interest rates later this year.
The likelihood of a rate cut in September 2025 has risen to approximately 60%, up from about 50% a month ago.
Despite worldwide uncertainty, the Indian rupee has remained relatively stable. This is consistent with the pattern observed in other worldwide currencies, which experienced a temporary decline before recovering.
Going forward, the rupee may experience some fluctuation due to global headwinds and the impending conclusion of the US tariff freeze.
However, the Reserve Bank of India's substantial foreign exchange reserves will assist to keep the rupee's movement smooth and under control, according to the report.
