The Indian rupee has been steadily falling in 2026, specially after the Iran War impacting the global economy at large. Rupee has touched a record low of 93.94 against the US Dollar, extending its year-to-date depreciation to 3.6 per cent. However, the Indian rupee opened stronger on Tuesday tracking a softer dollar and initial easing in crude oil prices, rising 34 paise to 93.64 against the US dollar. Amid the consistent falling of the Rupee, a key concern that has emerged is that if the Indian Rupee could weaken further toward the psychologically significant level of 100 per dollar.
The key reasons behind the swiftfall in the Indian Rupeein the recent past has been the surge in the crude oil prices following the Iran war, US Fed and other global central banks keeping the interest rates steady, foreign portfolio investor (FPI) outflows among others.
Will Indian Rupee reach 100 against Dollar?
Economists believe that the Indian Rupee to touch the level of 100 against Dollar depends upon multiple domestic and global factors, and at this point of time, it is uncertain that theIndian Rupee will reach 100 against Dollar.
"While where the rupee will go is uncertain - as it will depend on how much the dollar strengthens against other currencies and how much the Reserve Bank of India (RBI) intervenes in the market - the possibility of the INR reaching 100 versus the US dollar looks very unlikely," said Madan Sabnavis, chief economist at Bank of Baroda, as reported by Business Standard.
Such a fall would require an unusually strong surge in the US dollar globally, which would likely be countered by policy action, given the inflation risks associated with a steep currency fall, he said.
Crude oil prices: The swing factor. (AI Generated Image)
Crude oil prices: The swing factor
After the Iran War, the dynamics in the Middle East has changed rapidly leading to a major shipping crisis through the Strait of Hormuz. One of the key challenge that has erupted from the blockage of the route is the sharp rise in the brent crude oil prices.
Brent crude oil prices jumped as much as 65 per cent to $120 a barrel amid the Iran war.
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