Ashika Institutional Equities Forecasts Rupee Weakening Toward 97 by 2027

The Indian rupee is expected to remain stable around 95 per US dollar in the short term before gradually weakening toward 97 per dollar by March 2027, according to a report by Ashika Institutional Equities. This projection comes as the Reserve Bank of India advanced the closure of its special Foreign Currency Non-Resident (Bank) deposit window to August 31, 2026.

Banks had mobilized 52.3 billion USD through the FCNR(B) facility as of August 14. While the early closure may limit further inflows from this specific window, total special foreign exchange inflows—including Overseas Foreign Currency Bonds and External Commercial Borrowings—are projected to reach between 80 billion and 85 billion USD.

The Reserve Bank of India is likely utilizing these inflows to manage a record 103 billion USD net short forward position. This strategy prevents the rupee from strengthening significantly despite the substantial surge in dollar supply.