The rupee fell 17 paise to 88.26 against the US dollar in early trade on Monday, following the pressure from persistent FII outflow and uncertainty over Trump’s 50% tariffs on Indian goods.
FIIs continued
their selling spree in August taking the total selling through exchanges to Rs 39063 crores. With this August selling total FIIs selling in 2025, so far, have reached Rs 170940 crores.
Forex traders as quoted by PTI report said the rupee opened on a weaker note this morning and could remain under pressure as the tariffs from the US and outflows from FPIs weighed on the local unit.
On Friday, the rupee breached the 88 per US dollar mark for the first time and had closed at an all-time low of 88.09 against the greenback.
According to PTI report, the rupee hit an all-time intraday low of 88.31 last Friday after the RBI allowed it to go past 87.80, a level it had been protecting since the last six months and 87.95, its previous all-time low, said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP told PTI.
The United States’ 50 per cent tariff measure on Indian goods has officially taken effect as of 12:01 am EDT (9:31 am IST) on August 27. This includes a second 25 per cent duty added to the earlier 25 per cent hike notified earlier this month. The US Department of Homeland Security has confirmed that the higher rate will apply to any Indian goods “entered for consumption or withdrawn from warehouse for consumption” on or after this time.
The move is the culmination of US President Donald Trump’s ongoing tariff campaign targeting countries that maintain economic ties with Russia, with India being a key buyer of Russian crude. The hike has drawn strong condemnation from New Delhi, while Moscow has backed India’s right to choose its own trade partners.
According to estimates by the Global Trade Research Initiative (GTRI), nearly two-thirds of India’s total exports to the US, worth $60.2 billion out of $86.5 billion in FY25, will now fall under the higher 50 per cent tariff bracket. Government estimates peg the impacted exports slightly lower, at around $48.2 billion.
The hardest-hit sectors are those where India has a labour-intensive edge and a significant dependency on the US market. If the duties remain in place, GTRI projects that Indian exports to the US may drop to $49.6 billion in FY26, effectively reversing nearly five years of export growth.
Government data released on Friday showed India’s economy grew by a stronger-than-expected 7.8 per cent in April-June, its fastest pace in five quarters.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07 per cent to 97.70.
Brent crude, the global oil benchmark, was trading 0.41 per cent lower to USD 67.20 per barrel in futures trade, On the domestic equity market front, Sensex climbed 343.46 points to 80,153.11 in early trade, while the Nifty was up 105.8 points to 24,532.65.
The RBI on Friday said the country’s forex reserves dropped USD 4.386 billion to USD 690.72 billion during the week ended August 22. The overall reserves had jumped from USD 1.488 billion to USD 695.106 billion in the previous reporting week.
The Forex reserves fell as RBI continued to sell dollars to protect the rupee, Bhansali said to PTI, adding that “the RBI could allow depreciation of the rupee to maintain its competitiveness against other countries where tariffs are lower than India.”
