Rupee reverses early gains to end marginally higher amid tariff jitters

Indian Rupee today: The domestic currency closed 4 paise higher at 87.66 against the dollar on Friday, according to Bloomberg

The Indian Rupee traded slightly higher on Friday, on likely intervention by the Reserve Bank of India (RBI), as US President Donald Trump ramped up the trade pressure on India

 

The domestic currency closed 4 paise higher at 87.66 against the dollar on Friday after gaining 15 paise at open, according to Bloomberg. The local unit has depreciated 2.39 per cent so far this year. 

 

The rupee has depreciated by 2.4 per cent in the current financial year, whereas it has witnessed 2.2 per cent depreciation in the current calendar year.

 

President Trump ruled out any possibility of trade talks with India amid the ongoing tariff dispute. The US had already announced a 25 per cent tariff on Indian imports. The additional 25 per cent duty will apply to shipments arriving after a 21-day window, from August 28 onwards. 

 

 

During a press conference at the Oval Office, President Trump stated that no further trade negotiations will take place with New Delhi until the tariff issue is resolved, according to ANI. 

 

The Rupee is expected to be vulnerable in the short term as the US President's 50 per cent tariffs have triggered a risk-off sentiment from foreign portfolio investors (FPIs). FPIs have been net sellers for 14 straight sessions in the equity market, totalling nearly ₹45,000 crore, according to provisional NSE data. Experts reckon that this selloff might deepen further after the latest tariff tweak.

 

On Thursday, the RBI conducted another overnight variable rate reverse repo (VRRR) auction as the surplus liquidity in the banking system continues to hover around ₹4 trillion. On Wednesday, the net liquidity in the banking system was in a surplus of ₹3.90 trillion, according to the latest data from the RBI.

 

The dollar index, the measure of the greenback against a basket of six major currencies, was down 0.15 per cent at 98.25.

 

In commodities, crude oil prices headed for the steepest weekly losses since late June. Brent crude price was up 0.47 per cent at 66.74 per barrel, while WTI crude prices were higher by 0.45 per cent at 64.17, as of 3:40 PM IST.