The currency had closed at 85.50 per dollar on Wednesday (April 2).
At the interbank foreign exchange market, the rupee opened at 85.77 and quickly lost ground to 85.78.
Forex traders attributed the decline to risk aversion following US President Donald Trump’s decision to impose 27% reciprocal tariffs on Indian goods.
The move aims to counter what the US sees as high import duties imposed by India on American products.
The tariffs are expected to impact India’s exports to the US.
However, analysts suggest that India remains in a relatively better position than some of its competitors who are also facing increased levies.
“The unexpected tariffs have triggered a risk-off sentiment in the forex market. The rupee may trade in the 85.50 to 86.00 range today, with exporters likely to sell as the rupee nears 86.00,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Global cues
Foreign institutional investors (FIIs) offloaded equities worth ₹1,538.88 crore on Wednesday (April 2), according to exchange data.
Meanwhile, the US dollar index, which measures the greenback’s strength against six major currencies, was down 0.72% at 103.06.
Brent crude, the global oil benchmark, fell 2.20% to $73.30 per barrel in futures trade.
Outlook for the rupee
Traders expect volatility to persist, with concerns over a potential full-blown trade war. “If tensions escalate, the rupee could see further depreciation,” said a forex dealer.
–With PTI inputs
