The call – effectively a bet on a 3% appreciation in the rupee from its current level of 85.50 – is underpinned by India’s improving macroeconomic fundamentals, a revival in foreign inflows, lower oil prices, and the potential for a U.S.-India trade deal.
The rupee has lagged behind its Asian peers this year, showing little response to the dollar index’s more than 9% decline.
Goldman Sachs is recommending buying a 9-month USD/INR binary put option with a strike price of 83. A binary put option is a type of digital option that pays a fixed amount if the currency pair settles below the strike level at the expiry of the contract.
“We chose 9-month tenor for the trade as INR typically tends to appreciate during India’s financial year end”, which concludes on March 31, according to a sales note from Goldman Sachs.
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In support of their constructive outlook on the rupee, Goldman Sachs analysts highlighted that India’s GDP growth accelerated to 7.4% year-on-year in the March quarter from 6.4% in the previous three months. Their monthly activity tracker indicates that consumption remained robust in April. The investment bank’s note pointed to a return of foreign equity inflows, with over $4 billion flowing into Indian equities over the past two months. Goldman expects this trend to continue and potentially accelerate, driven by improving corporate earnings.
The possibility of a U.S.-India trade deal and lower oil prices could be other catalysts for the rupee. Goldman said that a rollback of the 10% reciprocal tariff would be seen as a positive development for Indian risk assets and the rupee.
While the U.S. had initially proposed a 26% levy on Indian shipmemts, the country-specific tariffs have been paused until July 8.
On oil, Goldman’s commodities research team expects Brent crude to average $60 for the remainder of 2025 and fall to $56 in 2026. Lower energy prices are a net positive for oil-importing countries like India and could support the rupee.
