The Indian rupee has been under intense scrutiny in recent months, with its sharp depreciation against the US dollar raising concerns across financial markets. According to Jefferies’ Christopher Wood, the rupee’s fall past the 90-per-dollar mark may be nearing an end, suggesting that the currency could have finally bottomed out. His analysis, published in Jefferies’ GREED & fear report, highlights the interplay of macroeconomic fundamentals, global monetary conditions, and India’s resilient economic base.
Background of the Rupee’s Performance
- In 2025, the rupee was one of the worst-performing emerging market currencies, declining by nearly 3.4% to trade close to ₹88.7 per US dollar.
- The depreciation was driven by strong dollar demand, global interest rate hikes, and capital outflows from emerging markets.
- Despite this weakness, India’s macroeconomic fundamentals—such as robust forex reserves, stable inflation, and strong GDP growth—have provided a cushion against further volatility.
- Chris Wood’s analysis suggests that while the rupee may not rebound sharply, the worst of its decline could be behind us.
Key Highlights of Jefferies’ Analysis
| Indicator | Details |
|---|---|
| Rupee’s Performance | Declined 3.4% in 2025, worst EM performer |
| Current Level | Near ₹88.7–90 per US dollar |
| Chris Wood’s View | Rupee may have bottomed out |
| Reasoning | India’s resilient macroeconomics, strong reserves, stable inflation |
| Outlook | Stabilization likely, sharp rebound less probable |
Rupee’s Weakness vs Stabilization Factors
| Factor | Cause of Weakness | Stabilization Factor | Implication |
|---|---|---|---|
| Global Dollar Strength | US Fed rate hikes, strong dollar demand | Fed pause or easing | Relief for rupee |
| Capital Flows | Outflows from EMs | Return of FDI and portfolio inflows | Supports currency |
| Inflation | Moderately controlled | RBI’s monetary policy | Maintains stability |
| Forex Reserves | Used to defend rupee | $689 billion reserves | Provides cushion |
Why Chris Wood’s Statement Matters
- Investor Confidence: Signals to global investors that India’s currency risks may be easing.
- Policy Direction: Reinforces RBI’s strategy of balancing inflation control with currency stability.
- Market Sentiment: Provides reassurance to businesses and households impacted by rupee volatility.
- Global Context: Positions India as a resilient emerging market amid global uncertainties.
India’s Economic Fundamentals
| Attribute | Details |
|---|---|
| Forex Reserves | $689 billion, among the world’s largest |
| Inflation Outlook | Benign, stable trajectory |
| GDP Growth | Strong, supported by domestic demand |
| Fiscal Position | Improving with reforms and revenue growth |
| Global Standing | Resilient compared to other EM currencies |
India’s strong fundamentals have played a crucial role in cushioning the rupee against sharper declines.
Expert Opinions
- Economists: Agree that the rupee’s depreciation may have reached its limit, though recovery will be gradual.
- Market Analysts: Highlight the importance of global monetary trends in determining the rupee’s trajectory.
- Policy Makers: Emphasize the role of forex reserves and RBI interventions in stabilizing the currency.
- Investors: Express cautious optimism, awaiting clarity on global interest rate cycles.
Challenges Ahead
- Global Volatility: Geopolitical tensions and commodity price fluctuations could pressure the rupee.
- Dollar Strength: Continued US dollar dominance may limit rupee appreciation.
- Capital Flows: Sustained inflows are needed to support stabilization.
- Policy Balance: RBI must carefully manage interest rates and liquidity.
Opportunities for India
- Attracting FDI: Stable currency can encourage foreign direct investment.
- Boosting Trade: Competitive rupee levels can support exports.
- Strengthening Markets: Currency stability enhances investor confidence.
- Global Positioning: Reinforces India’s image as a resilient emerging market.
Broader Context of Global Forex Trends
- Emerging market currencies have faced pressure due to global monetary tightening.
- India’s rupee, despite being the worst EM performer in 2025, shows signs of stabilization.
- Central banks worldwide are recalibrating policies amid moderating inflation.
- India’s case reflects the importance of strong fundamentals in weathering global shocks.
Public Sentiment
- Businesses welcomed the possibility of rupee stabilization, easing import costs.
- Investors expressed cautious optimism about reduced volatility.
- Citizens hoped for relief in inflationary pressures linked to currency weakness.
- Overall sentiment reflected guarded confidence in India’s economic resilience.
Conclusion
The analysis by Jefferies’ Chris Wood that the rupee may have bottomed out against the dollar offers a ray of optimism amid months of depreciation. While a sharp rebound is unlikely, India’s strong macroeconomic fundamentals, robust reserves, and stable inflation outlook suggest that the worst may be over. As global monetary conditions evolve, the rupee’s trajectory will depend on capital flows, RBI’s policy stance, and external shocks. For now, stabilization appears to be the most probable path forward.
Disclaimer
This article is intended for informational purposes only and does not constitute financial or policy advice. Currency movements, global monetary trends, and economic outcomes are subject to change based on evolving circumstances. Readers are encouraged to follow official updates for accurate information. The author and publisher are not responsible for any decisions made based on this article.
