USD/INR: Key budget announcement ahead – MUFG

FXStreet Insights Team FXStreet

The Indian Rupee remains under pressure as USD/INR approaches the 92.00 level. The upcoming FY2026/27 Budget announcement is crucial for assessing fiscal consolidation amidst rising capital outflows. Markets expect the government to target a debt-to-GDP ratio of around 54-55% for FY2026/27, which may influence market sentiment, notes Michael Wan, Senior Currency Analyst at MUFG Bank.

Focus on fiscal consolidation trajectory

"Moving forward, India will have two key important events in the upcoming week – the Budget and RBI’s monetary policy decision."

"Markets will watch closely for whether the central government in India commits to a credible fiscal consolidation path, and this is coming in the broader context of rising debt borrowing requirements from state governments with increasing cash transfer programs at the state level."

"The expectation for markets is that India will likely target government debt to GDP at around 54-55% for FY2026/27 from 56% of GDP currently."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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