Worst Over for Rupee? US Trade Deal Holds Key to 2026 Stability

• Indian Rupee's 2026 outlook shows cautious optimism due to domestic growth and low inflation, but global factors, especially the India-US trade deal, are critical.
• Major research houses expect the rupee to exit its depreciating phase in 2026, with SBI Research forecasting an average of 87.
• Progress on the India-US trade deal, particularly easing steep tariffs (up to 50%), is crucial for improving India’s external balance and rupee stability.
• The rupee was Asia's worst-performing currency in 2025, hitting a record low of Rs 91.08, mainly due to FPI outflows and stalled trade talks.
• While some predict recovery (BofA 88), others like Barclays foresee further weakening to 94 by end-2026, highlighting diverse expert opinions.

Why It Matters: Rupee's 2026 stability hinges on the India-US trade deal and foreign capital flows.