The Indian rupee is reeling under immense pressure against the US dollar in 2025. The INR fell to a low of 88.76 and would likely continue its downturn well into 2026. The local currency is down more than 3% year-to-date and slipped more than 5% in a year against the USD. It is attracting weak sentiments despite the dollar displaying weakness in the DXY index and is struggling to climb above the 100 mark.

According to a latest report from the Union Bank of India, the rupee will likely fall to 90 against the US dollar by March 2026. The development indicates that the USD would strengthen further and throttle the INR in the currency market. “By March 2026, fundamentally, we continue to see USD/INR inching towards the psychological threshold of USD 90 levels,” read the report.

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Rupee Vs the US Dollar

The Union Bank of India’s report also offered a detailed analysis of how the rupee can fight back against the US dollar. However, that depends on external factors beyond its control, offering third parties more power. The technical perspective from the report states that the domestic currency could strengthen if there are sustained inflows into the equity markets.

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In addition, the rupee could solidify its position against the dollar if the India-US trade talks see concrete progress. These are external factors and need support from intermediate advancements. Geopolitical developments are already under pressure as tariff-related policies are reshaping the markets. The cards are stacked against India, where Trump is eager to gain a foothold in trade.

The imports and exports industry in India is among the hardest hit due to the tariffs. The normal flow of goods has seen a major impact, with businesses seeking refuge from the Modi-led government. The rupee needs to rebound against the US dollar for the trade to normalize.