Saturday 02 / May / 2026
MUSCAT: The Indian Rupee could weaken further to INR 250 per Omani Rial in the near term, a Muscat-based financial expert has warned, as global and domestic pressures continue to weigh on the currency.
The Rupee recently plunged to a historic low of INR 95.30 against the US Dollar, marking the first time it has breached the 95 level.
Exchange houses in Oman are currently quoting around INR 246.50 per Omani Rial, offering Oman-based remitters one of the strongest exchange-rate windows in recent times.
Speaking to Times of Oman, financial expert Adv. R. Madhusoodanan said that if the ongoing West Asia crisis persists, further depreciation is likely.
He noted that the Rupee has been under sustained pressure for several months due to a combination of factors, including rising crude oil prices, geopolitical tensions, and strong global demand for the US Dollar.
Higher energy costs, coupled with increased shipping and insurance expenses, have intensified the downward pressure. In addition, a shift by investors from Indian equities to safe-haven assets such as gold has further weakened the currency.
A report by the State Bank of India (SBI) also highlighted growing concerns, calling for a comprehensive structural policy response to address risks from rupee depreciation, imported inflation, and a widening balance of payments (BoP) deficit.
The report cautioned about the “second-round effects” of external shocks, particularly through the exchange rate channel. While a weaker rupee initially raises the cost of imports such as oil and raw materials, businesses eventually pass on these costs to consumers, leading to broader inflation.
It warned that this could push inflation expectations higher, complicating efforts to maintain price stability.
According to the data, the Rupee depreciated 6.39 per cent between April 2025 and February 2026, with a further 3.63 per cent decline following the West Asia conflict. At the same time, foreign institutional investors (FIIs) have pulled out USD 6.4 billion, adding to the pressure.
Looking ahead, the report projected that India’s balance of payments could remain in deficit at USD 28 billion in FY27. The current account deficit is expected to widen to USD 54.1 billion, compared with USD 31.5 billion in FY26. Although the capital account may post a surplus of USD 26.5 billion, it is unlikely to fully offset the current account gap.
The report warned that the BoP could remain negative for a third consecutive year, underscoring the need for urgent policy intervention. It stressed that relying solely on exchange rate adjustments is not sustainable in a volatile global environment, and that broader measures are needed to manage external imbalances and inflation risks.
