USD vs INR: The Indian rupee depreciated past 93 against the US dollar for the first time on Friday, marking its sharpest single-day decline in more than four years, amid concerns over the impact of Iran’s war-driven disruptions to global energy supplies on Asia’s third-largest economy.
The rupee dropped over 1% to 93.7350 per dollar, breaching its previous record low of 92.63 hit earlier in the week. It eventually settled at 93.71, ending the week down around 1.3% — its steepest weekly decline since late 2022.
According to market experts, a key driver has been the persistent FII outflows, with foreign investors offloading over Rs. 1 lakh crore in CY2026, reflecting risk-off sentiment toward emerging markets amid heightened global uncertainty.
“ This has coincided with a sharp appreciation in the U.S. dollar index, which has rebounded from levels of around 95.50 to above 99.50, even testing highs of 100.50 recently, thereby exerting additional pressure on emerging market currencies, including the rupee,” said Sugandha Sachdeva, Founder of SS WealthStreet.
Why Indian rupee is falling?
The escalation of geopolitical tensions in West Asia has worsened the situation further. A sharp jump in brent crude oil prices to around $120 per barrel, following the conflict that began in late February, has heightened concerns over imported inflation and a widening current account deficit. Given that India imports nearly 85–88% of its crude needs, rising oil prices lead to higher demand for dollars from importers, putting downward pressure on the rupee.
At the same time, supply disruptions near the Strait of Hormuz — a key global oil transit chokepoint — have sparked concerns across several sectors, including fertilizers, aviation, chemicals, and manufacturing inputs, thereby amplifying inflationary pressures and external imbalances.
Domestic factors have also contributed to the weakness. A roughly 13% correction in Indian equity markets from their peak has hurt investor sentiment, leading to capital outflows and increased currency volatility.
Sachdeva further highlighted that the RBI has actively intervened in the forex market to smooth volatility and curb excessive depreciation, global cues remain dominant. The US Federal Reserve’s hawkish stance, coupled with receding rate-cut expectations, continues to support the dollar, limiting any meaningful recovery in the rupee.
Can the Indian Rupee touch 100 per dollar?
According to Sachdeva, the Indian rupee is likely to remain under pressure in the near term, with the immediate depreciation expected towards 94.80–95.
“ The 95 level emerges as a critical psychological as well as structural threshold, and a decisive breach above this mark could potentially accelerate the depreciation trend, opening the door towards 97.80–98.00 levels. While intermittent intervention by the RBI and any temporary cooling in crude oil prices may provide short-term stability to the currency, the broader bias remains weak. Sustained strength in crude prices, along with a resilient US dollar, is likely to continue exerting downward pressure on the rupee, thereby keeping risks tilted toward further depreciation,” she added.
Meanwhile, Anuj Gupta, a SEBI-registered market expert, believes that the Indian currency is likely to witness a further downtrend due to the bear trend in equity markets, higher crude oil prices & FIIs selling in the markets.
“Higher dollar index after stabilizing interest rates impact negatively on rupee against dollar . We are expecting rupee may test 94 to 95 levels in a near term,” Gupta said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
