INR: Underperforming outlook for 2026 – MUFG

💡 DMK Insight

The Indian Rupee’s projected underperformance through 2026 is a red flag for forex traders right now. This forecast from MUFG suggests a weakening trend that could impact not just the INR but also related emerging market currencies. Traders should be wary of potential volatility, especially if geopolitical tensions or economic data releases exacerbate the situation. A declining rupee could lead to increased inflationary pressures in India, which might prompt the Reserve Bank of India to adjust monetary policy, affecting interest rates and investor sentiment. Watch for key levels around recent support and resistance points in the INR/USD pair; a breach could signal further downside. On the flip side, if the rupee stabilizes or strengthens unexpectedly, it could create a buying opportunity for those looking to capitalize on a rebound. Keep an eye on upcoming economic indicators and central bank statements that could shift the narrative.