Rupee hits record low against US dollar amid tariff concerns

The Indian rupee today reached an all-time low of 88.37 against the US dollar, surpassing its previous record low of 88.36 set last week. This decline is attributed to enduring tariff pressures from Washington, which continue to impact India's trade prospects and capital inflows. These factors have kept the rupee in a narrow trading range between 88.20 and 87.95, as market participants await developments in tariff negotiations between India and the United States.

The Reserve Bank of India has been actively selling dollars around the 88.20 level to manage excessive volatility in the forex market.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "Rupee traded weak by 0.35% at 88.40 as mixed FII flows and a firmer dollar index near 97 kept pressure intact. Focus remains on the US CPI data, which could drive volatility in the dollar and in turn the rupee. Crude prices stayed volatile but hovered in lower zones, offering partial support. Market sentiment remains tied to updates on the US–India trade deal, which could trigger sharper moves. For now, rupee can be seen trading within 87.85–88.10 as support and 88.55–88.70 as resistance."

In related market dynamics, the dollar index, which measures the US dollar's strength against a basket of six major currencies, rose slightly by 0.05% to 97.82. Meanwhile, Brent crude prices, a global oil benchmark, dipped 0.10% to $67.42 per barrel in futures trading.

The persistent weakness of the rupee occurs against a backdrop of broader economic uncertainties and international trade issues. As policymakers and traders navigate these challenges, the currency’s performance remains closely watched by investors. By stabilising the rupee through interventions, the Reserve Bank of India aims to mitigate short-term fluctuations. The ongoing tariff discussions and economic indicators such as the CPI will likely continue to influence the rupee's trajectory in the short to medium term.