New Delhi: A sliding rupee is not a weak rupee even as it breaches the psychological barrier of 90 per US dollar, but it is expected to recover with a trade deal likely to be completed before March 2026, a report said. Russian President Vladimir Putin will visit India this week for a summit with Prime Minister Narendra Modi aimed at boosting energy, defence and economic ties, as Moscow seeks to secure oil sales amid tightening Western sanctions, a research report from the SBI’s Economic Research Department said.

However, it said, India’s crude imports are set to hit a low as the USA tightened sanctions and India’s imports of Russian oil appear to taper. “Lingering uncertainty over the Indo-US trade deal is keeping sentiments fragile. However, we expect trade deal likely to be completed before March 2026. The bouts of uncertainty, fuelled by hiccups in trade talks, could exert pressure on INR with frequent pull-backs,” it said.

Since April 2, 2025, when the US announced sweeping tariff hikes across economies, the Indian rupee (INR) has depreciated by 5.5 per cent against the greenback, notwithstanding sporadic phases of appreciation owing to optimism over the US-India trade deal, it said, adding, INR is the most depreciated currency, but it is not the most volatile.

At present, the ability of market participants to supply greenbacks is quite limited, leaving the Mint Street as the last resort and ultimate supplier of USD to the market, but the RBI has likely chosen a restrained approach, avoiding aggressive interventions as part of its policy to not protect any level, it said.

Additionally, it said, once the rupee breached the 90 level, several exotic options like barriers were triggered, amplifying volatility and accelerating the pace of depreciation.

“With MPC (monetary policy committee) scheduled to take a call on policy rate, a cut at this juncture can be construed as a knee-jerk reaction to protect the rupee, which would be detrimental to an otherwise fairly resilient currency, riding the domestic vigor,” it said.