Global investors are positioning for further weakness in the Indian rupee, with some preparing for a drop to an unprecedented 100 per dollar. Firms including Aberdeen Investments, MetLife Investment Management and Gamma Asset Management SA see the three-digit threshold as increasingly likely amid rising oil costs from the US-Iran conflict.

The currency has already fallen more than 7% this year, pressured by widening external balances and foreign fund outflows. Global funds have pulled a record $23 billion from Indian stocks while purchasing just $1.3 billion of local debt in 2026. Higher oil prices from Middle East tensions compound these pressures, stoking speculation about how far the rupee could fall.

Bank economists are revising forecasts downward as pressure mounts. Kotak Mahindra Bank projects the rupee trading between 93 and 99 per dollar, while ANZ expects 97.5 by year-end. The Reserve Bank of India may intervene more aggressively if the currency nears the 100-mark, though policymakers have emphasized smoothing volatility over defending specific levels.

A break below key thresholds would force investors to reassess risk premiums and yield compensation strategies. The rupee's sharp decline reflects broader emerging market stress as the dollar strengthens and oil costs rise.