Mumbai, April 1 -- The Indian rupee may come under further pressure in the coming months if the ongoing West Asia crisis continues, with the Reserve Bank of India (RBI) likely needing to remain flexible in its approach, according to a report by Yes Bank.

The report stated that the rupee could weaken to 97.00-97.50 against the US dollar in the first half of FY27.

"RBI will have to be open to accept higher depreciation pressures if the crisis continues. We see USD/INR at 97.00-97.50 in H1FY27, with the view altering if the war ends and oil returns to a more reasonable level of USD 65-75/bbl."

Explaining the reasons behind this outlook, the report said that the "goldilocks" phase of the Indian economy has been disrupted due to the West As...