USD to INR Forecast 2024 – Indian Rupee Outlook Against the US Dollar

The Indian rupee (INR) has seen significant volatility against the US dollar (USD) in recent years. With high inflation, rising oil prices, and global economic uncertainty, many are wondering what the future holds for the INR/USD exchange rate. This comprehensive review analyzes the factors that influence the rupee and provides an in-depth USD to INR forecast for 2024.


The INR/USD exchange rate impacts India’s economy and trade competitiveness. Given India’s dependence on imported oil and other commodities often priced in dollars, INR depreciation leads to higher inflation and trade deficits. On the other hand, a weaker rupee benefits exporters and the IT/BPO industry. Understanding the forces that drive rupee fluctuations provides insights into its expected trajectory.

This review examines the fundamental factors influencing the INR/USD exchange rate – macroeconomic trends, monetary policy divergences, investment flows, oil prices, and geopolitical developments. Using historical data and leading indicators, it provides a detailed technical and fundamental forecast of the rupee’s outlook for 2024. Both optimist and pessimist projections are presented to account for uncertainties.

For companies doing business in India or exposed to exchange rate risk, this analysis offers an invaluable reference for forecasting currency exposures. Individuals planning international travel, investments, or remittances will also find the projections helpful for decision-making. Read on for the most comprehensive USD to INR predictions for 2024.

Fundamental Drivers of the INR/USD Exchange Rate

India and US Economic Growth Differentials

As the world’s largest economy, US economic prospects significantly sway the dollar’s strength. Meanwhile, India’s growth outlook determines investment flows into the economy, influencing INR valuation. If India’s economy is expanding faster than the US, the rupee tends to appreciate, and vice versa.

Future projections point to strong Indian growth of over 7% in 2024 boosted by urban consumption and services. However, high inflation remains a concern. US growth faces headwinds from declining productivity and aging demographics. Yet inflation threatens to dent consumer demand. Overall, growth differentials will likely support INR strength.

Monetary Policy Divergence

Interest rate differentials between the US Fed and RBI also impact currency movements. With the Fed hiking rates aggressively to curb inflation while RBI takes a gradual approach, the interest rate gap has narrowed significantly. This reduced the relative return for USD deposits, leading to some INR appreciation recently.

Going into 2024, RBI may continue playing catch-up to tame inflation. But room for further Fed hikes appears limited given looming recession risks. Thus, monetary policy divergence may reverse course next year, weighing on the rupee.

Balance of Payments Position

India’s trade and current account deficit heavily influences sentiment toward the rupee. Elevated oil prices and rising imports have led to record trade deficits, crossing $100 billion in the first half of FY 2022-23. However, services exports and remittances help offset some of the merchandise trade imbalance.

Looking ahead, India’s import bill depends on global crude oil prices. Export growth faces headwinds from weakening global demand. However, the current account deficit may moderate from 5% to 3% of GDP if oil prices soften. This will ease pressure on the rupee.

Equity Fund Flows

Portfolio flows into Indian stocks and bonds impact INR valuation. After witnessing over $45 billion outflows in 2022 amidst Fed tightening, India’s relatively strong growth prospects could renew foreign investor interest in 2024 as developed markets slowdown.

But further global equity selloffs driven by recession fears may dampen emerging market inflows. RBI’s foreign exchange reserves also fell below $500 billion from over $630 billion last year due to interventions to support the INR. Thus, uncertain global risk sentiment makes the growth in investment flows a wild card.

Global Oil Price Projections

As a major oil importer, India’s terms of trade deteriorates when global crude prices rise, weakening the rupee. After spiking above $120/barrel, oil has eased to around $80 recently on demand slowdown fears.

Multiple factors like OPEC supply decisions, EU sanctions on Russia, global recessions risks, and geopolitics will steer future price trends. If oil trades around $70-80 in 2024, it will curb India’s import bill versus $100+ levels. This can significantly relieve pressure on the rupee.

Technical Forecast Analysis

After averaging around 75 per dollar since 2018, the rupee breached 80 this year for the first time amid broad USD strength. However, the INR has appreciated nearly 10% from its October low of 83.29 per dollar on moderating oil prices, robust services exports, and indications of Fed pivot.

Momentum indicators like the 50 and 100-day moving averages establish current support around 81-82 levels. The relative strength index recovered from oversold levels below 30 to above 50, signaling improving sentiment.

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However, the death cross pattern earlier with the 50-day MA falling below the 200-day MA indicates the broader downtrend may persist. The rupee needs to break the 79-80 resistance convincingly for a bullish trend reversal.

Historical Price Cycles

Examining longer-term USD/INR cycles, the exchange rate witnessed 5-year up-and-down cycles between 2002 to 2015, before stabilizing around 65-70 from 2016 to 2020. This period also saw low inflation and oil prices along with strong capital inflows that supported the rupee.

Post-pandemic, the cycle seems to have reversed with the rupee weakening to 80+ levels amid inflation and external deficit pressures. If historical patterns repeat, the rupee may remain weak in the first half of this decade before recovering later.

USD to INR Forecast for 2024

Integrating fundamental drivers, technical factors, and historical cycles, this section provides projected scenarios for the USD to INR rate in 2024. Considering uncertainties, bullish, bearish, and neutral forecasts are presented.

Bullish Forecast – INR appreciates to 75-78 range

Under optimistic conditions of retreating oil prices, resurgent capital inflows, moderating trade deficit and further Fed rate cuts, the rupee may claw back to 75-78 range by end-2024.

This assumes crude around $60-70, equity inflows over $20 billion, current account deficit narrowing to 2% of GDP and RBI catching up with Fed easing as US recession bites. Technically, INR needs to break 79-80 resistance for such a bullish reversal.

Bearish Forecast – INR depreciates to 85+ levels

If elevated oil prices persist above $90 along with widening trade deficits crossing 5% of GDP, hawkish Fed damaging emerging market flows, and global recession curbing exports, the rupee may tumble to 85+.

INR may retest all-time lows of 83-84 in the first half of 2024 before deteriorating further if sentiment sours. RBI would likely spend reserves defending INR at these lower levels.

Neutral/Base Forecast – INR trades in 80-83 range

The most likely scenario is for the rupee to trade rangebound between 80-83 through 2024 as oil hovers around $75-80. While portfolio flows may improve with the growth differential supporting INR, worsening terms of trade will spur interventions by RBI to prevent overheating.

Thus, two-way pressures may keep USD/INR elevated in the 80-83 corridor. Only a decisive break above 83 or below 79 will tilt the balance either way. Within this range, some volatility around major events is expected.

Implications of Rupee Outlook for Stakeholders

The INR direction against the dollar in 2024 will have significant ramifications for various entities. Here are some key implications:

  • Importers: Weaker rupee makes imports of oil, gold, fertilizers, machinery etc. costlier, fueling inflation. But appreciation lowers input costs. Hedging reduces currency risks.
  • Exporters: Depreciation aids export competitiveness, boosting revenue for IT/BPO, textiles, agri-exports. But currency volatility hampers planning. Natural hedging and forwards help.
  • NRIs: Rupee depreciation reduces remittance value in India. Appreciation increases purchasing power. Optimal time horizon crucial for remittances.
  • Foreign investors: Weaker rupee increases INR-denominated returns and asset values. But currency volatility raises risks. Hedging with forwards necessary.
  • Travellers: Cheaper foreign trips and education costs if rupee strengthens. Weaker currency inflates international travel expenses. Planning horizon critical.
  • RBI: Persistent rupee weakness increases imported inflation. Requires higher forex reserves and interventions to curb excessive volatility either side.

FAQs on USD to INR Outlook for 2024

What was the highest USD to INR rate seen historically?

  • The highest exchange rate ever was 83.29 INR per USD reached in October 2022 amid a broad global flight to safety. This breached the previous high of around 80.50 seen during the 2013 taper tantrum crisis.

Will rupee hit 100 per dollar in 2024?

  • It is highly unlikely the rupee will touch 100 per dollar in 2024 barring any exceptional crisis or disaster scenario. Even the bearish forecast only projects the exchange rate reaching 85+ under severe stress conditions next year.

Is dollar getting stronger compared to rupee in 2024?

  • In 2023, the dollar has appreciated nearly 10% against the rupee due to the Fed’s aggressive monetary tightening. For 2024, further dollar strengthening seems limited as the Fed may cut rates amid recession risks. Under the bullish scenario, the rupee may even regain some lost ground versus the greenback.

Will rising crude oil prices weaken the rupee?

  • Yes, a surge in global crude oil prices typically puts significant downward pressure on the rupee. India’s import bill rises substantially when oil tops $100/barrel, weakening the current account balance and INR valuation.

How does rupee depreciation impact the economy?

  • Weaker rupee makes imports more expensive, fueling imported inflation and widening trade deficits. But it benefits exporters by improving competitiveness and earnings. Currency volatility also impacts foreign investor sentiment and inflation expectations.
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What is the importance of the USD/INR rate for international travelers?

  • The USD/INR rate has a direct bearing on the cost of international travel, education, and healthcare for Indians. Rupee depreciation inflates foreign trip expenses, while appreciation offers savings. The currency outlook must be considered when planning overseas spends.


Amidst global uncertainty, forecasting the Indian rupee’s trajectory against the dollar in 2024 remains an intricate exercise with upside and downside risks. However, analyzing critical drivers like oil prices, economic differentials, monetary policy, and investment flows provides helpful guideposts.

While strong domestic growth and improving exports point to rupee resilience, challenges from high deficits and external headwinds persist. As such, a rangebound but volatile trend between 80-83 appears the most probable over the next year barring major surprises.

Companies exposed to exchange rate risk need proactive hedging strategies. Individuals planning cross-border transactions should hedge through forwards and optimize transaction timing based on currency outlook. With prudent planning, the currency volatility expected in 2024 can be managed effectively to both limit risks and capitalize on opportunistic movements.

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