Rupee trades weak on tariff, FPI outflow concerns; opens lower at 87.70/$

Indian Rupee today: The domestic currency opened 7 paise lower at 87.70 against the dollar on Friday, according to Bloomberg

The Indian Rupee traded lower on Friday as trade uncertainties outweighed support from a softer dollar and weak crude oil prices.

 

The domestic currency opened 7 paise lower at 87.70 against the dollar on Friday, according to Bloomberg. The Rupee has slipped 2.6 per cent in the current financial year and 2.47 per cent in 2025 so far. In August, it rose around 0.15 per cent against the dollar.

 

The rupee closed slightly higher, pressured by recently imposed US trade tariffs on Indian goods, persistent foreign portfolio investor (FPI) outflows, month-end demand, and the Reserve Bank of India’s efforts to stabilise the currency, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

 

 

Market sentiment remains fragile, with FPIs selling ₹28,905 crore worth of Indian equities in August 2025, analysts said. Meanwhile, the new 50 per cent tariffs on India took effect on August 27, and are among the highest in Asia as tensions between New Delhi and Washington ramped up. However, US Treasury Secretary Scott Bessent on Wednesday signalled possible relief from the additional tariffs. 

 

The tariffs are expected to hurt Indian exports to the US, widen the trade deficit, and strain the rupee further by raising import costs and fuelling domestic inflation, Bhansali said. Today, the rupee opened slightly weaker and is expected to trade in the 87.40–90 range, with focus on RBI’s dollar sales to support the currency, he added. 

 

Until there is clarity on alternatives, either through negotiations with the US or by striking trade agreements with other nations, investors are likely to stay cautious, according to Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. "The rupee is expected to remain under pressure with a near-term range of 87.25-88.25."

 

The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.19 per cent at 98.00, and is headed for its monthly drop. The US will release its personal consumption expenditure price index for July. Besides, the US's Q2 GDP increased at a 3.3 per cent annualised rate, against 3 per cent growth a year ago.

 

In commodities, crude oil prices continued to trade lower amid diminishing prospects of a Russia-Ukraine peace deal. Brent crude price was down 0.71 per cent at 68.13 per barrel, while WTI crude prices were lower by 0.67 per cent at 64.17 per barrel, as of 9:07 AM IST.