Rupee slides for fifth straight session on tariff woes; opens at 87.72/$

Indian Rupee today: The domestic currency opened 14 paise lower at 87.72 against the dollar on Tuesday

The Indian rupee extended losses for a fifth straight session on Tuesday as traders braced for 50 per cent tariffs on Indian goods effective August 17.

 

The domestic currency opened 14 paise lower at 87.72 against the dollar on Tuesday, according to Bloomberg. The Rupee has slipped 2.6 per cent in the current financial year and 2.40 per cent in 2025 so far. In August, it fell around 0.12 per cent against the dollar.

 

The domestic currency was set to open weaker at 87.70 after the Trump Administration announced an additional 25 per cent tariff on Indian goods effective August 27, according to Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP. On Monday, the rupee rose to 87.34 but closed lower at 87.58, as dollar buying picked up amid foreign portfolio investor equity selling and a 10 basis points rise in India's 10-year bond yields, he said.  

 

The weakness in the currency comes after a draft notice from the US Department of Homeland Security, which outlined plans by US President Donald Trump to impose a 50 per cent tariff on Indian products. The increased levies are set to apply to Indian goods "entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on 27 August 2025."

 

"The currency, which touched 86.90 last week, has since slipped by around 80 paise. Exporters are likely to sell near 87.75, while importers remain cautious, awaiting the Reserve Bank of India’s move," Bhansali said. 

 

Meanwhile, the dollar dropped as the feud between US President Donald Trump and the Federal Reserve intensified. The President moved to fire Fed Governor Lisa Cook on allegations that she falsified documents on mortgage applications. The sentiments also worsened after Trump threatened to place export curbs on chips in retaliation against other nations' digital services taxes. 

 

The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.05 per cent at 98.38. 

 

In commodities, crude oil prices eased in Asian trading, giving up some of their previous gains as traders weighed the prospects of additional US sanctions on Russia. Brent crude price was down 0.47 per cent at 68.48 per barrel, while WTI crude prices were lower by 0.49 per cent at 64.48 per barrel, as of 9:00 AM IST. 

 

The currency market will be closed on Wednesday, 27 August, in observance of Ganesh Chaturthi.