Indian Rupee ends at 85.51/$ as markets focus on tariff announcement

The Indian Rupee closed weaker after tumbling 21 paise during open on Wednesday with the dollar slightly falling ahead of the reciprocal tariffs announcement by the US President Donald Trump. 

 

The domestic currency opened 4 paise weaker at 85.51 against the greenback after closing at 85.47 on Friday, according to Bloomberg data. The currency gained some ground after opening at the 85.68 mark. Tracking the fall in the dollar index, the currency appreciated by 2.39 per cent in March, registering the best month since November 2018. Meanwhile, during the last current financial year, it witnessed a 2.42 per cent fall. 

 

 

Trump is expected to announce his reciprocal tariffs plan on Wednesday during an event in the White House Rose Garden. Media reports indicate that the White House has not yet finalised its tariff plan, with Trump's team still deliberating on their options ahead of the event. 

 

 

The rupee remained flat as markets awaited US reciprocal tariff measures and their potential impact on the global economy, according to Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. With uncertainty surrounding the speech, volatility could pick up later in the session, he said. "The rupee range is expected between 85.00-85.90, with tariff updates and global sentiment driving further moves."

 

The rupee benefitted from broad dollar weakness and the Reserve Bank of India (RBI) allowing a two-way movement without much of an intervention in March, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. After registering a 3.2 per cent decline in March, the dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.16 per cent to 104.08. 

 

 

Any imposition of tariffs on Indian goods could put additional pressure on the rupee, while relief from such tariffs would provide much-needed support to the currency, Amit Pabari, managing director at CR Forex Advisors, said. Driven by rising crude prices and escalating concerns over reciprocal tariffs, the rupee is expected to find strong support around 85.50-85.60, with a potential rebound towards 86.00-86.20 levels, he said. 

 

Brent prices have surged by more than $6 per barrel since its recent lows, stoking concerns about rising inflation in India, Pabari said. Crude oil prices edged lower, pausing last month’s rally as traders' focus turns to the implications of 'liberation day.' Brent crude oil was down 0.12 per cent to $74.40 per barrel, while WTI crude was down 0.07 per cent at 71.15 per barrel as of 3:35 PM IST.