Nomura expects Rupee to strengthen versus dollar by December 2025, predicts levels of 84 against $

Nomura sees a stronger Indian rupee by December 2025 on the back of a weaker dollar index and strong inflows. According to Nomura, Indian Rupee will grow stronger against the US Dollar by the end of this year, owing to the current uncertainties in the global economy.
Nomura is expecting the Indian Rupee to be around 84 against each US dollar by December 2025, stronger from the expectation of various economists of around INR 87.50 to 87.75 against one dollar.
The selling of Indian equities by foreign portfolio investors has weakened INR in the last couple of months, it dipped to an all time low of 87.92 in February, close to the mark of 88/$1, however, the inflow in the form of debt and equities in the coming months is expected to push the value of INR.
According to Nomura’s analysts quoted in an ET report, India will be the preferred hub for investments in the emerging markets. The Japanese group is hinting towards an inflow of $15 billion in the form of debt in the Indian economy.
Saion Mukherjee, head of equity reach for Nomura in India said, “FPIs have been big sellers from Indian equities last year, especially in the last six months. Now, they don't own enough Indian equities. So incrementally, India is better off from a flow perspective and we don't see a big risk off.”
Nomura's projection of 84/$1 by December 2025 is attributed to substantial dollar acquisitions by the Reserve Bank of India. These purchases aim to strengthen their reserves, which presently amount to $677.8 billion.
As reported by Reuters, Nomura Securities has talked about the US dollar index falling down to levels of 2021.
Craig Chan, global head of FX strategy at Nomura Securities said, “ There will be active dollar purchases and accumulation of reserves by the RBI, along with cleaning up of the RBIs net short positions in the forward book. During this time, the rupee would come out as an underperformer compared to the euro and yen.”
British multinational bank, Standard Chartered have given predictions of INR to value 87.75 against one dollar by the end of 2025.