Rupee slips to 88.72/$ as Trump slaps 100% tariffs on pharma

Indian Rupee today: The domestic currency opened flat but fell five paise to 88.72 in morning trades on Friday

The Indian Rupee snapped two-day gains on Friday to trade lower with a possibility of touching a new low as a fresh round of tariffs by the US President hit traders, once again. 

 

The domestic currency opened flat but fell five paise to 88.72 in morning trades on Friday, according to Bloomberg. The currency fell 3.6 per cent so far this year, while it hit an all-time low of 88.79 on Tuesday. 

 

US President Donald Trump on Thursday announced latest tariffs, including a 100 per cent duty on branded or patented pharmaceuticals starting October 1. He also unveiled a 25 per cent duty on heavy trucks and a 50 per cent levy on kitchen cabinets and related products. 

 

 

"Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a company is building their Pharmaceutical Manufacturing Plant in America," Trump wrote. "There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started."

 

This comes after the currency was already hit by an overhaul in the US immigration system. Trump signed an executive order raising the H-1B application fee to $100,000 earlier this week, and said he is proposing to base allocation of the H-1B visa on skill level and wages instead of the current lottery method.

 

The Indian Rupee is set to open weaker at 88.78, weighed down by a stronger dollar index and a decline in Asian currencies, analysts said. The currency, which traded in a narrow 88.60-88.70 band yesterday as the Reserve Bank of India (RBI) likely intervened, remains vulnerable to testing 89.00, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

 

Foreign portfolio investors (FPIs) sold shares worth ₹5,000 crore on Thursday amid global trade uncertainties. Sentiments were weakened after Trump imposed 100 per cent tariffs on pharmaceutical exports, Bhansali said.  

 

Meanwhile, markets await the RBI's rate decision on October 1. The centre is expected to keep its key interest rate at 5.50 per cent on October 1 and for the rest of the year. 

 

The US dollar rose after the US economy grew in the second quarter at the fastest pace in nearly two years. The measure of the greenback against a basket of six major currencies was down 0.16 per cent at 98.39.

 

The commodities, crude oil prices rose after tensions with Russia heated up as European diplomats warned Moscow that NATO is ready to respond with force to airspace violations. Brent crude price was up 0.17 per cent at 69.54 per barrel, while WTI crude prices were higher by 0.29 per cent at 65.17 per barrel, as of 9:03 AM IST.