The Indian rupee fell 29 paise to open at 87.95 against the US dollar on Tuesday (August 5), hitting a six-month low and approaching the sensitive 88-mark. Currency traders cited a combination of geopolitical pressures, capital outflows, and policy anticipation as reasons behind the sharp move.
The rupee declined by 29 paise at INR 87.95 against the US dollar on Tuesday, August 5, registering a six-month low and approaching the 88 mark.
Reportedly, the currency traders mentioned several factors behind his fall in value including capital outflow, geo-political cues, and policy expectations.
Further, the pressure on rupee heightened after US President Donald Trump 25 per cent tariff call over Indian exports given the south Asian nation’s dealing with Russia for crude oil.
The 47th US President’s recent executive order impacted over fifty nattions with a specific 25 per cent tariff iimposition on India.
The forex market reacted swiftly, with the rupee declining from Monday’s (August 4’s) close of 87.66.
On Monday (August 4), it had already weakened by 48 paise. Traders suggested that the Reserve Bank of India (RBI) may have intervened on Tuesday (August 5) morning to prevent a breach of the 88 per dollar threshold.
Foreign institutional investors (FIIs) also continued to pull cash out of Indian markets, offloading Rs 2,566 crore worth of equities on Monday (August 4). The benchmark Sensex and Nifty both slipped around 0.25 per cent amid broader market caution.
Meanwhile, the Reserve Bank’s Monetary Policy Committee (MPC) began its three-day meeting on Monday (August 4), with the outcome due on Wednesday (August 6). Investors are closely watching for any shifts in the interest rate stance or commentary on inflation and growth.
Adding to the uncertainty, global crude prices edged lower as Brent futures fell to USD 68.57 per barrel after OPEC+ announced plans to raise output in September.
The rupee had previously touched 87.95 in February 2025, and the 88 level remains a critical resistance point.
