MUMBAI (Jan 7): UBS Investment Bank expects the Indian rupee to weaken to 92 per US dollar by March, making the case that any relief from a potential US-India trade deal announcement would likely be undermined by the central bank replenishing foreign exchange reserves. The RBI can be expected to restore those reserves in periods of stability, Arora said in a media conference call on Tuesday. A capital flow, growth issueIndia’s equity outflows accounted for much of the rupee’s nearly 5% fall in 2025, with lingering US tariffs adding to the pressure. Arora argues that pressure on India’s capital account stems more from growth concerns than trade uncertainty, with relatively expensive equity valuations playing a key role. Though India has reported robust real GDP growth, slower nominal growth figures have weighed on earnings expectations, contributing to record selling of Indian equities by foreign investors last year.

Source: The Edge Markets January 07, 2026 08:17 UTC