 "Indian Rupee gains after five-day slide; closes stronger at 87.63/$")
The Indian Rupee ended higher on Thursday, snapping a five-day losing streak, after US Treasury Secretary Scott Bessent signalled possible relief from the newly imposed 50 per cent tariffs.
The domestic currency closed 5 paise higher at 87.63 against the dollar on Thursday, according to Bloomberg. The Rupee has slipped 2.45 per cent in the current financial year and 2.36 per cent in 2025 so far. In August, it fell around 0.06 per cent against the dollar.
The new tariffs that took effect a day earlier are among the highest in Asia as tensions between New Delhi and Washington ramped up. The additional tariffs were imposed for India’s continued purchase of Russian crude oil.
Until there is clarity on alternatives, either through negotiations with the US or by striking trade agreements with other nations, investors are likely to stay cautious, according to Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. "The rupee is expected to remain under pressure with a near-term range of 87.25-88.25."
The blow lands hardest on low-margin, labour-intensive industries -- apparel, textiles, auto parts, engineering goods, gems and jewellery, shrimp, and carpets, as per an analysis by trade body Global Trade Research Initiative (GTRI). The US accounts for $81 billion of India’s $443 billion goods exports -- 2 per cent of India’s GDP, according to the latest government data.
Describing the India-US relationship as "very complicated", Bessent, in a television interview, said that "at the end of the day, we will come together." He nevertheless asked the US’s European allies to "step up." "I don't see them threatening the tariffs on the Indians. As a matter of fact, they're the ones buying the refined products made from Russian oil."
Bessent also dismissed speculation that India's rupee could emerge as a reserve currency, even as New Delhi expands trade settlement options with Brics partners.
The dollar index, a measure of the greenback against a basket of six major currencies, was down 0.15 per cent at 98.08.
In commodities, crude oil prices eased after the US data showed a lower-than-expected drop in crude inventories. Brent crude price was down 0.57 per cent at 67.66 per barrel, while WTI crude prices were lower by 0.53 per cent at 63.81 per barrel, as of 3:40 PM IST.