New Delhi, Jan. 6 -- The rupee is expected to continue its long-term depreciation, reaching 94 against the dollar by FY27, as structural headwinds outweigh temporary relief from easing trade tensions, according to UBS Investment Bank.

The bank stated that the currency could weaken to 92 by the end of the current financial year, before further sliding. The Swiss bank's outlook hinges on a combination of persistent capital outflows, underwhelming nominal GDP growth, and a central bank intent on rebuilding its war chest.

While a cooling of global tariff rhetoric may provide a window for recovery, analysts said that the upside for the rupee remains capped. Any rebound is expected to stall long before the currency can reclaim lost ground.

"...