Rupee snaps five-day drop on potential tariff relief; opens at 87.52/$

The Indian Rupee snapped a five-day losing streak on Thursday as the US Treasury Secretary Scott Bessent hinted at a possible relief in the 50 per cent tariffs that came into effect from August 27. 

 

The domestic currency opened 16 paise higher at 87.52 against the dollar on Thursday, according to Bloomberg. The Rupee has slipped 2.4 per cent in the current financial year and 2.3 per cent in 2025 so far. In August, it fell around 0.04 per cent against the dollar.

 

The rupee, which closed lower at 87.68 on Tuesday, is set to open higher as the Reserve Bank of India (RBI) intervened by selling dollars at 87.80 to prevent a new all-time low, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors. LLP. Exporters are expected to sell dollars around 87.80 for hedging, while importers may buy on dips to meet near-term payment obligations, he said.  

 

 

The new tariffs that took effect a day earlier are among the highest in Asia as tensions between New Delhi and Washington ramped up. The additional tariffs were imposed for India’s continued purchase of Russian crude oil. 

 

 The blow lands hardest on low-margin, labour-intensive industries -- apparel, textiles, auto parts, engineering goods, gems and jewellery, shrimp, and carpets, as per an analysis by trade body  Global Trade Research Initiative (GTRI). The US accounts for $81 billion of India’s $443 billion goods exports -- 2 per cent of India’s GDP, according to the latest government data.

 

Describing the India-US relationship as "very complicated", US Treasury Secretary Scott Bessent, in a television interview, said that "at the end of the day, we will come together." He nevertheless asked the US’s European allies to "step up." "I don't see them threatening the tariffs on the Indians. As a matter of fact, they're the ones buying the refined products made from Russian oil."

 

Sentiment remains uncertain after the United States imposed an additional 25 per cent tariff on Indian goods from Tuesday, though US Treasury Secretary Bessent hinted at possible relief by September, suggesting the two countries could resolve trade issues, Bhansali noted. "The rupee is expected to remain in the 87–88 range, with a slim chance of strengthening to 86.50 in the medium term."

 

The dollar index, a measure of the greenback against a basket of six major currencies, was down 0.15 per cent at 98.08.

 

In commodities, crude oil prices eased after the US data showed a lower-than-expected drop in crude inventories. Brent crude price was down 0.76 per cent at 67.53 per barrel, while WTI crude prices were lower by 0.78 per cent at 63.65 per barrel, as of 9:11 AM IST.