Rupee tanks 61 paise to close at all-time low of 88.19 against US dollar

Mumbai: The rupee breached the 88-mark for the first time and closed at an all-time low of 88.19 (provisional) against the US dollar, registering a sharp decline of 61 paise amid heightened Indo-US trade deal tensions.

Forex traders said the rupee is under persistent pressure amid the imposition of steep tariffs by the US compounded with persistent foreign fund outflows and month-end dollar demand.

Moreover, a negative trend in domestic equities dented market sentiments.

At the interbank foreign exchange market, the rupee opened at 87.73 against the US dollar, then lost ground and fell to an intra-day low of 88.33. The domestic unit settled for the day at an all-time low of 88.19 (provisional) against the greenback, registering a sharp fall of 61 paise over its previous close.

On Thursday, the rupee rose by 11 paise to close at 87.58 against the US dollar.

This is the first time the rupee has breached the 88/US dollar level. On February 10, 2025, the unit had witnessed an intra-day low of 87.95 and on August 5, 2025, the domestic unit had settled at 87.88 against the greenback.

"We expect the rupee to trade with a negative bias as additional trade tariffs on India by the US raise worries over India's trade deficit. Weak domestic markets and selling pressure from FIIs may pressurise the rupee further," said Anuj Chaudhary, Research Analyst Currency and commodities Mirae Asset ShareKhan.

The Reserve Bank of India, in its latest bulletin on Thursday, said persisting uncertainties related to the US trade policies pose downside risk to the overall demand in the Indian economy, while the inflation outlook for the near-term has become more benign than anticipated earlier.

Commerce and Industry Minister Piyush Goyal on Friday said the government will soon announce various measures to expand the country's domestic outreach and global foray, aiming to boost exports.

He also assured exporters of all support in dealing with the current global uncertainties at the trade front, which were caused by the imposition of high tariffs.

The US has imposed a steep 50 per cent tariff on Indian goods entering America from August 27. This high duty is expected to impact exports of certain labour-intensive sectors like textiles, leather, footwear and shrimp.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.14 per cent to 97.94.

"Dollar may continue to remain weak on rising rate cut expectations in September. Traders may take cues from prelim core PCE price index and personal spending data from the US. USD-INR spot price is expected to trade in a range of 87.90 to 88.70," Chaudhary said.

Brent crude, the global oil benchmark, was trading 0.76 per cent lower to USD 68.10 per barrel in futures trade.

On the domestic equity market front, Sensex dropped 270.92 points to settle at 79,809.65, while the Nifty declined 74.05 points to close at 24,426.85.

Foreign Institutional Investors offloaded equities worth Rs 3,856.51 crore on Thursday, according to exchange data.