Indian Rupee opens at 85.87/$; Gains 17 paise on hopes of tariff relief

The Indian rupee opened stronger, slipping back below the 86 mark, following US President Donald Trump's remarks on possible tariff relief for auto parts and consumer electronics.

 

The domestic currency strengthened 17 paise to open at 85.87 against the greenback after closing at 86.05 on Friday, according to Bloomberg data. This comes after the currency witnessed its highest single-day gain in more than two years on Friday. 

 

The Indian rupee is likely to open slightly stronger as markets await further clarity on the tariff exemptions announced by President Trump and the timeline for their possible reimposition on electronics, said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. "We could see more exports happening in the 90-day period that Trump has given so there could be more inflows and rupee could gravitate towards 85.25 in the coming days."  

 

 

Trump said he is considering temporary exemptions to tariffs on imported vehicles and parts to allow automakers additional time to establish manufacturing operations in the US.

 

However, the tensions between the US and China are escalating, with the US now imposing a 145 per cent levy on goods from Beijing. The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.08 per cent at 99.71, as of 9:10 AM IST, its lowest level since April 2022. 

 

The Dollar Index plunged by 3.1 per cent to multi-month lows as the bond market threw a tantrum, Amit Pabari, managing director at CR Forex Advisors, noted. This unusual yield spike came not from expectations of higher rates but from recessionary fears and geopolitical unease, he said.  

 

The Indian rupee staged a sharp recovery last week, driven by the announcement of a 90-day delay on the imposition of reciprocal tariffs excluding China and a stronger Chinese yuan, Pabari said. However, recent economic data pointed to waning signs as India’s industrial production growth slowed to 2.9 per cent in February, the weakest in six months, Pabari added. "The rupee is expected to face a strong resistance at 86.40-86.50 levels and is likely to move towards 85.50 levels."

 

Meanwhile, crude oil prices edged higher following a subdued session on Monday as traders remained focused on developments around tariff-related news. Brent crude oil was up 0.08 per cent to $64.93 per barrel, while WTI crude was up 0.08 per cent at 61.58 per barrel as of 9:15 AM IST.