The rupee is expected to trade in the range of 87.5-88.5 against the US dollar in the near term, while strong macroeconomic fundamentals are likely to support the domestic currency in the long run, according to a report released by Bank of Baroda.

The report stated, "We are anticipating a range of 87.5-88.5/USD in the near-term. Over the longer term, we continue to believe that robust macro-fundamentals should support the domestic currency."

The Indian currency depreciated to a record low in August 2025 as additional US tariffs came into effect. Month-end demand from importers and sustained foreign portfolio investor (FPI) outflows from domestic equity markets further contributed to the weakness in the rupee.