New Delhi: The rupee has depreciated 7.04% in calendar year 2026, with experts saying that the currency can depreciate further and touch the 100 per dollar mark if the current pace of decline continues, reported The Hindu.While the depreciation of rupee started before the West Asia crisis as a result of continuous equity sales by foreign institutional investors, the pace of depreciation was slow, with the rupee becoming cheaper with respect to the US dollar by just a little over 1 between January 1 and February 28.However, after the Iran war started, the depreciation picked up pace and reached 5.01% between March 2 and May 21, coinciding with a time when crude oil prices have shot up owing to the war, reported The Hindu.The gravity of the situation becomes evident from the fact that the full year depreciation rates for 2025 and 2024 were 4.9% and 2.9%, respectively, a mark that was surpassed in the first five months of 2026 with a depreciation rate of 7.04%.After falling to an all-time low of 96.82 on Wednesday (May 20), the rupee closed at 96.20 on Thursday (May 21) after the Reserve Bank of India (RBI) stepped in conducted heavy dollar sales via state-run banks to halt a persistent slide in the rupee, reported Reuters.The RBI is also considering other options such as an interest rate hike, more currency swaps and raising dollars from investors overseas to rescue the falling rupee, reported Bloomberg, citing people familiar with the matter.According to the Bloomberg report, top officials at the RBI, including governor Sanjay Malhotra, have discussed the possible course of actions in a series of internal meetings. The central bank is also considering raising dollars overseas through a deposit scheme for non-resident Indians and selling a sovereign dollar bond, with the latter measure being decided by the Union government.Meanwhile, with the possibility of the rupee surpassing the 100 per dollar mark, global investors are bracing up for the occasion.“The rupee remains vulnerable to further depreciation, and 100 against the dollar is an important psychological threshold that investors will increasingly focus on. The most immediate catalyst for a break of the level would be another leg higher in oil prices,” Rajeev De Mello, global macro portfolio manager at Gamma Asset, told Economic Times.Experts say that the consistent depreciation of the rupee has had severe implications for the Indian economy.“India’s current account deficit faces more severe pressure than those of Indonesia and the Philippines. U.S. President Donald Trump’s global tariffs damage Indian exports, while a weaker rupee amplifies a higher war-related oil import bill and discourages investor equity inflows,” said a report by UBS, reported The Hindu.The Indian rupee has been the worst performing currency in Asia in 2025 and continued to be the worst performing in the current year. The Wire had earlier reported that it has also fallen by nearly 12% against the Pakistani rupee since Operation Sindoor in 2025.This sharp decline demonstrates that India’s economic challenges are not merely a result of the global strength of the dollar or the crisis in West Asia. Instead, these figures highlight fundamental weaknesses in domestic policy and economic management under the leadership of prime minister Narendra Modi.