IANS New Delhi

The performance of Indian rupee in FY25, when compared with other global currencies, was relatively stable, with a stronger dollar weighing on all major currency pairs, a report showed on Wednesday.

However, towards the end of the year, a reversal in dollar strength and FPI inflows into debt supported a rally in rupee, with the domestic currency recouping as much as 2.4 per cent in a single-month alone, according to a report by Bank of Baroda (BoB). The coming year is likely to be marked by a period of volatility, awaiting clarity on US tariff policies. This will also set the stage for the US Fed's rate actions, in turn, affecting how the dollar behaves.

"On the domestic front, the rupee is likely to find support from improvement in growth prospects, lower inflation and stable external deficits. Overall, we expect the rupee to trade in the range of 85.5-87.5 per dollar in FY26," said Aditi Gupta, Economist, Bank of Baroda. FY25 was an interesting year for the rupee as it underwent periods of stability, rapid depreciation and consolidation thereafter.