Goldman Sachs Turns Bullish on Rupee Amid Trade Optimism
Goldman Sachs has advised clients to take a bullish stance on the Indian rupee, even as the currency edged close to its all-time low of 88.80 against the U.S. dollar on Monday. The investment bank’s optimism stems from positive developments in India-U.S. trade negotiations, including the recent reduction in Russian oil imports by Indian state-run refiners. Analysts at Goldman expect the rupee to appreciate by 1–2% if Washington sets tariffs on Indian goods at or below 25%.
The firm has recommended a strategic options play — buying a put option on the dollar-rupee pair with a strike price of 88, expiring in March 2026, and featuring a European knock-out at 85.5. This exotic structure allows investors to profit if the rupee strengthens but becomes void if the dollar-rupee rate dips below 85.50 before expiry, helping lower the option’s cost. Goldman has also suggested a relative-value position, betting that the rupee will outperform Indonesia’s currency over the next three months.
Despite the rupee being Asia’s worst-performing major currency this year — down around 3% due to trade concerns and equity outflows — Goldman remains confident in a turnaround. “If tariff talks stall, we expect the RBI to intervene more aggressively near 88.80,” analysts noted, adding that any rupee gains could be limited by the central bank’s strategy and increased corporate hedging. The call underscores Goldman’s belief that the currency’s downside may be contained, with potential for modest appreciation if trade conditions improve.
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