Indian rupee is expected to follow a two-phase path in FY27. In the early part of the year, the rupee is likely to remain stable or slightly stronger due to steady capital inflows, controlled inflation, and supportive domestic conditions. However, in the later part of FY27, the rupee may come under pressure and weaken if the US Federal Reserve resumes tightening (increasing interest rates), which can attract global funds back to the US and strengthen the dollar. Overall, this suggests that while the rupee may perform well initially, global factors—especially US interest rates—will play a key role in its movement later in the year.
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