As spot price for the rupee touched Rs 96.96 per dollar and one-year forward premium near Rs 3.40, the one-year forward rupee breached the 100 mark to the greenback for the first time ever, market participants said. This fiscal, the unit has failed to reverse the unflattering trend of FY26, when the rupee had lost the most in 14 years against the dollar.
The rupee has depreciated nearly 7.7% during the current calendar year and close to 13% year on year.
Still, commentators believe the pace of depreciation could slow, particularly if geopolitical tensions ease.
“For now, the market’s immediate battlefield remains around the Rs 97 level, a zone that may decide whether panic deepens further or the rupee begins to reclaim some lost ground,” said VRC Reddy, treasury head at Karur Vysya Bank. “While near-term pressures may persist, the pace of depreciation could gradually moderate from here.”
In the spot market, the rupee hit another new closing low of 96.83 against the dollar, after having erased some of the losses from the all-time low of 96.96 seen earlier in the day.
The weakness reflected unabated dollar outflows and a negative market sentiment amid elevated crude prices.The currency ended the day 30 paise weaker in the spot market than the previous close Tuesday.
“The speed of the rupee’s descent since May 11 has caught the market off-guard. This downward pressure is fuelled by higher energy prices and aggressive FII capitulation,” said KN Dey, a forex market consultant.
“With no bottom in sight, trying to forecast a stabilisation point is pure guesswork, and even a psychological slide to 100 may be on the table,” Dey said.
Foreign institutional investors (FII) have taken out Rs 2.65 lakh crore from Indian markets in 2026 so far, close to last year’s total exit of Rs 3.04 lakh crore.
A rebound in the rupee, or slowing in the pace of its retreat against the dollar, hinges on lower crude oil prices or a solution to the geopolitics in West Asia.
“Any favourable shift in global developments, easing in crude prices or reduction in geopolitical tensions may trigger a sharp technical appreciation in the rupee, which cannot be ruled out,” said Karur Vysya Bank’s Reddy.
