Rupee may hit 100/dollar by June if West Asia conflict escalates, says BMI
This story was originally published at 19:51 IST on 6 May 2026
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NEW DELHI – The Indian rupee can fall to 100 against the dollar by June if the war in West Asia escalates over the coming weeks, according to Fitch Group company BMI. "A significant bout of risk-off sentiment due to sudden escalation could push the rupee into even weaker territory," BMI said in a report.
In BMI's base case, the rupee is expected to stay around 95 a dollar by the end of 2026. Wednesday, the rupee settled at 94.61 a dollar, up almost 0.7% from Tuesday's close. The rupee has fallen over 3% since the war began Feb. 28 and is down over 5% against the dollar in 2026. The Indian currency had hit a record low of 95.4350 a dollar Tuesday.
The Fitch Group company sees more pressure on the rupee from a widening of India's current account deficit, increased global uncertainty, and fewer interest rate cuts by the US Federal Reserve. "Were the effective US tariff rate on Indian imports to rise from its current level of 13.5%, this could further widen India's current account deficit, dampen investor sentiment and cause additional rupee depreciation," it said in its report.
BMI expects the war to widen India's current account deficit by 40 basis points to 1.3% of GDP in the current financial year. The war can also reduce India's remittance income, which may put further pressure on the current account.
The Indian currency can be supported by slower profit repatriation, currency intervention by the Reserve Bank of India, and India's solid long-term prospects, BMI said. "We think the RBI will use its seven months worth of import cover to counteract sentiment-driven outflows and stabilise the currency in the coming quarters," it said. End
US$1 = INR 94.61
Reported by Shweta
Edited by Rajeev Pai
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