Rupee projected to weaken toward 100 per dollar, CNBC reports

India’s rupee is projected to weaken toward the 100-per-dollar mark as persistent fund outflows, elevated global crude prices, and a wider current account deficit outweigh the Reserve Bank of India’s defensive market interventions, CNBC reported.

Over the opening weeks of October 2026, the currency recovered from near-record lows to trade near the 95 level following emergency policy steps announced by the central bank. Economists and strategists warn that these administrative controls offer only temporary relief against deep-seated external imbalances.

Reserve Bank of India Restricts Speculative Trading

The Reserve Bank of India stepped up its defense of the currency by introducing measures designed to restrict speculative FX trading and make forward dollar purchases more expensive. On October 10, the central bank opened a special window to supply dollars directly to three public sector oil marketing companies—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—effectively removing their daily greenback demand from the open spot market.

These actions follow an aggressive campaign earlier in the year to bolster capital reserves. According to data cited in reports by Indian brokerage Ambit Capital, a special Foreign Currency Non-Resident deposit scheme launched in June led to forward dollar commitments of $200 billion. However, subsequent downward pressure forced heavy spot market interventions.

Economists and FX traders across six banks estimate that the RBI has deployed roughly $75 billion to $80 billion in spot dollar sales and currency swaps since June 8. India’s foreign exchange reserves declined to $734.6 billion as of October 2, dropping about $51 billion from their September peak. Analysts at Ambit Capital noted that net forward dollar liabilities reached approximately $200 billion at the end of September, reducing effective reserve cover and leaving the currency exposed.

Energy Costs and Investor Exits Weigh on Rupee

India remains highly vulnerable to supply disruptions stemming from the ongoing conflict involving Iran. High energy import costs, combined with exits of foreign equity investors who have pulled almost $30 billion from local markets since the start of 2026, continue to weigh heavily on the exchange rate.

A firm cited by CNBC projects the rupee to trade around 97 per dollar by the end of 2026 and slide to 98 by mid-2027. Mizuho Securities shares a similar timeline, pointing to late 2026 and early next year for the 98 mark. A representative from the firm cited by CNBC stated that a move toward 100 rupees per dollar remains a possibility if oil prices climb further and the current account deficit widens.

RBI Governor Sanjay Malhotra defended the central bank’s stance in a recent interview, asserting that officials are determined to ensure orderly market movements and that the currency is not fundamentally overvalued. Independent treasury experts emphasize that while administrative controls can moderate volatility, they cannot indefinitely offset structural trade deficits.

More on this story: Indian Rupee Holds Steady Against Stronger Dollar Amid RBI Intervention and Global Pressures