The Indian Rupee is set to remain within the 80-83 range against the US Dollar as the Reserve Bank of India (RBI) will be involved in FX intervention, economists at Deutsche Bank report.

RBI to be proactively involved in FX intervention

“We expect the RBI to be proactively involved in FX intervention, to keep Rupee broadly within the 80-83 range, though we don't rule out intermittent overshoot and undershoot from time to time.” 

“We expect USD/INR to be around 82.50 levels by end-Dec'23.”

As far as the need for replenishing FX reserves are considered, one potential positive could be if DXY continues to weaken meaningfully through 2023. This can then add to valuation gains for INR and push up FX reserves (in contrast to the large valuation losses that have led to the depletion in India’s FX reserves in 2022).”