The rupee opened about 24 paise weaker at 87.66 per USD against previous close of 87.4250, weighed down by Trump’s 25 per cent tariffs and “Russia” penalty on India. The Indian unit is currently trading at 87.6050.
Market players see the RBI intervening in the market to prevent volatility in the Indian currency. The rupee had hit an all time low of 87.95 against the USD earlier this year.
The rupee saw its biggest single-day drop in three months,closing about 61 paise lower yesterday (Wednesday).
Trump, in a post, announced 25 per cent tariffs on imports from India and also a penalty for buying crude oil and military equipment from Russia.
IFA Global, in a report, said, “After yesterday’s move, rupee has become the worst performing Asian currency YTD (year-to-date). The rupee is likely to trade in a 87.45-87.90 range with weakening bias”
Amit Pabari, MD, CR Forex Advisors, said, “This isn’t just about trade—it’s about power. With its $37 trillion debt pile once sustained by foreign buyers of US Treasuries, the US is now turning to tariffs as that model begins to break down.
“Most allies have fallen in line. China pushed back hard. Europe caved. Japan complied, as it has since the Plaza Accord. But India, with a more domestic-oriented economy and deep strategic autonomy, is not folding easily—though it will face some pain in the near term, especially on the rupee front.”
He noted that the tariffs have come just when foreign capital outflows have already been a drag. With policy uncertainty rising, risk appetite is likely to shrink further, prompting more selling in Indian assets.
“The US accounts for nearly 18 per cent of India’s total exports, worth over $87 billion. A tariff wall could dent export earnings and widen the current account deficit, adding yet another layer of strain on the currency.
“Till there’s clarity on the tariff front, pressure on the rupee is likely to persist. At a time like this, every dip should be viewed as a buying opportunity, especially with volatility expected to stay elevated. A meaningful reversal can only be expected if the pair breaks below 87.20, which currently acts as a key support level,” Pabari said.
Published on July 31, 2025
