The Indian rupee is likely to see further depreciation against the US dollar in the near term owing to Donald Trump’s presidential win. This has fueled an expectation that the dollar index will remain high, currency experts said.

However, experts believe that in the longer run, the Indian rupee may appreciate considering the macroeconomic prospects of India and the expectation of a rate cut by the US Federal Reserve, which will make emerging markets attractive.

“Trump’s win has turned up the pressure on the rupee, hinting at potential further depreciation as U.S. policies continue to bolster the dollar. Despite this immediate impact, a longer-term view on the Dollar Index indicates a possible downtrend,” said Amit Pabari, managing director, CR Forex Advisors.

Adding to this, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP said Donald Trump’s victory is good for business and Industry so stock markets will remain up. “However, we need to see what he announces as policies in the next three months till his inauguration. Expecting rupee to depreciate slowly and steadily.”

Trump won the US presidential election, cruising past his Democratic rival Kamala Harris in a tough battle. The 78-year-old Republican leader crossed the 270-majority mark needed to clinch the presidency by securing a victory in the key swing state of Wisconsin.

According to races called by the Associated Press (AP), 277 electoral votes went to Republican candidate Trump and 224 to Democratic Party’s Harris.

In the last four days, the Indian rupee has been hitting record lows due to outflows from the equities, a strong dollar index, and other cues. Indian rupee today stood at 84.3600.

As a result, traders believe that the Reserve Bank of India (RBI) is intervening in the market to prevent a sharp decline of the Indian rupee against the US dollar.

The rupee remains volatile, evident from the dip in India’s forex reserves in the last four weeks. As per the RBI’s data, forex reserves dipped $3.463 billion during the week ending October 25. Total reserves were $684.805 billion.

Pabari said Trump’s proposed tax cuts, without corresponding spending cuts, could expand the federal deficit, driving up debt and potentially pushing investors to demand higher interest rates, initially strengthening the dollar due to increased returns. However, mounting debt may ultimately erode confidence in the currency.

Going ahead, currency experts believe that the Indian rupee may trade in the range of 84.00 to 84.60 against the greenback.