RBI ups crude oil, exchange rate baseline assumptions for FY27
The Reserve Bank of India (RBI) on Wednesday said it expects crude oil prices to average $85 per barrel and the rupee to be at 94 against the dollar in FY27.The central bank has made the projections in the bi-annual Monetary Policy report released on Wednesday.
The crude oil price assumption has been upped to $85 per barrel during FY27, from $70 per barrel during H2FY26. It also increased exchange rate projections to 94 against the US dollar during FY27, from 88 against the greenback during H2FY26, report showed.
“The baseline assumption for crude oil price has been taken at $85 per barrel for FY27 and $75 per barrel for FY28, in line with average Brent future prices,” RBI said in a report.
The report added that the International crude oil prices exhibited a declining trend during October 2025-December 2025, easing to around $63 per barrel, owing to OPEC+ announcements which increased supply in the global oil market. This trend reversed sharply in March 2026, with prices surging past $100 per barrel for the first time since November 2022, driven by escalating geopolitical tensions.
The nominal exchange rate of the Indian rupee was in the range of 87-92 per US dollar during October 2025 to January 2026. Since October 2025 and up to the first half of November, the rupee remained stable, trading around 88 per US dollar.
Towards the end of November, the INR exhibited depreciating bias and reached an all-time low, almost touching 92 per US dollar in the second fortnight of January 2026, driven by portfolio outflows, steady dollar demand and tight global financial conditions.
In March, however, depreciation pressures accentuated with the INR breaching 95 per US dollar intraday, surpassing its previous record lows amid concerns over West Asia conflict.
Indian rupee has posted its biggest annual decline in 14 years in FY26, depreciating by 9.88 per cent against the US dollar, marking the sharpest fall since FY12 when the currency had weakened by 12.4 per cent.
The steep depreciation was driven by persistent foreign fund outflows, elevated crude oil prices, and a strengthening dollar globally, which put sustained pressure on the domestic currency. Volatility in global financial markets and tightening liquidity conditions further weighed on the rupee during the fiscal year.
