Union Bank of India Forecasts Sideways Rupee Trade for October

Union Bank of India forecasts the Indian rupee will trade sideways in October 2026, maintaining a range of 95.30 to 96.80 per US dollar. The bank attributes currency support to trade agreements and robust foreign exchange reserves, though it notes pressure from rising global yields and foreign portfolio investor outflows, which reached approximately USD 5.9 billion in September.

The rupee closed September at 95.83 per dollar following volatility caused by oil prices peaking at USD 110 per barrel and US Federal Reserve rate hikes. In response to these fluctuations, the Reserve Bank of India utilized FX Sell/Buy operations in the forward market to manage liquidity and stabilize the currency.

Looking ahead, Union Bank of India anticipates a 25 basis point rate hike in October. The bank expects one or two additional rate increases to occur during the remainder of the 2027 fiscal year.