With the U.S. President’s 90-day pause on the liberation day tariff nearing , the current stability of the rupee may not be sustained after the first half of fiscal 2026, according to experts. 

In a report by MUFG, its Senior Analyst Mizhael Wan  had forecast that by Q1FY26, the rupee would appreciate as high as 83 a dollar as a trade deal with the U.S. is expected to be completed and the current inflation is well within RBI’s threshold. 

However, analysts in India flag the possibility of an uptick in volatility in the long term, while they forecast the rupee to trade  between 84 to 86 a dollar in the first quarter of FY 2026. 

“From September 4, I expect the volatility to pick up. because July is the time when the deadline (for the 90 day pause) expires, …and that could be the time when volatility can be back in the market,” said Anindya Banerjee, Senior Vice President at Kotak Securities adding that the rupee may even breach the 86 a dollar level. This, however, is subject to RBI’s moves to arrest the volatility, he added.

Some of the volatility may have already started showing, said Dilip Parmar, Senior Research Analyst at HDFC Securities. “The Indian Rupee has recently demonstrated elevated reactivity to movements in the U.S. dollar, a trend that is widely anticipated to continue,” said Mr. Parmar.