MUMBAI: The rupee plunged past the 88-mark for the first time, closing at a record low of 88.19 (provisional) against the US dollar, a sharp decline of 61 paise amid rising tensions over the Indo-US trade deal.
Forex traders said the domestic currency is under sustained pressure due to steep US tariffs, persistent foreign fund outflows, and month-end demand for the dollar. Weak trends in domestic equities also weighed on market sentiment.
At the interbank foreign exchange market, the rupee opened at 87.73 per dollar, weakened during the session, and touched an intra-day low of 88.33 before settling at the all-time low of 88.19, down 61 paise from the previous close. On Thursday, it had risen 11 paise to 87.58.
This marks the first time the rupee has breached the 88-per-dollar level. Previously, it recorded an intra-day low of 87.95 on February 10, 2025, and closed at 87.88 on August 5, 2025.
“We expect the rupee to continue trading under pressure as additional US trade tariffs raise concerns over India’s trade deficit. Weak domestic markets and selling pressure from foreign institutional investors could further weigh on the currency,” said Anuj Chaudhary, Research Analyst – Currency and Commodities, Mirae Asset ShareKhan.
In its latest bulletin, the Reserve Bank of India noted that ongoing uncertainties related to US trade policies pose downside risks to overall domestic demand, although the near-term inflation outlook appears more benign than previously anticipated.
Commerce and Industry Minister Piyush Goyal said the government will soon roll out measures to strengthen India’s domestic reach and global presence, aiming to boost exports. He also assured exporters of support in navigating current global uncertainties caused by high tariffs.
The US has imposed a 50% tariff on Indian goods entering America from August 27, which is expected to hit exports in labour-intensive sectors such as textiles, leather, footwear, and shrimp.
Meanwhile, the dollar index, which tracks the greenback against six major currencies, rose 0.14% to 97.94. “The dollar may remain weak amid expectations of a September rate cut. Traders will watch upcoming US personal spending and prelim core PCE data. USD-INR spot is likely to trade between 87.90 and 88.70,” Chaudhary added.
Brent crude traded 0.76% lower at USD 68.10 per barrel in futures.
On the domestic equity front, the Sensex fell 270.92 points to 79,809.65, while the Nifty dropped 74.05 points to 24,426.85. Foreign institutional investors sold equities worth Rs 3,856.51 crore on Thursday, according to exchange data.
