Rupee Faces Steep Depreciation if West Asia Crisis Persists

07-May-2026 11:26 AM

Mumbai: In recent months, the Indian currency (the Rupee) has undergone significant depreciation, with the value of one US dollar reaching the 94–95 Rupee range. Experts warn that if the crisis in West Asia persists, this figure could climb to as high as 100 Rupees per dollar.

According to a leading credit rating agency, it would come as no surprise if the dollar's value were to hit the 100-Rupee mark by June. Tensions between Iran and the United States remain high, and the crisis surrounding crude oil and natural gas supplies could intensify. Uncertainty regarding shipping movements through the Strait of Hormuz has not yet dissipated, and risks associated with maritime transport also persist. This situation is expected to have a particularly pronounced impact on India.

Based on the rating agency's baseline scenario, the average value of the Rupee against the dollar is projected to hover around the 95-mark by the end of 2026. As of the previous day, the exchange rate stood at 94.61. Data from the agency indicates that the dollar is likely to continue strengthening against the Rupee in the future.

The depreciation of the Rupee and the strengthening of the dollar will result in both benefits and drawbacks for India. On one hand, the competitiveness of Indian products in the international market will increase, leading to improved export performance; on the other hand, imports from abroad will become significantly more expensive. This could trigger a sharp rise in the prices of products that India imports on a large scale—particularly pulses and edible oils.