Currency watch: Rupee plunges 61 paise to all-time low of 88.19 vs dollar; FIIs add to pressure
The rupee on Friday tumbled past the 88-per-dollar mark for the first time, finishing the day at an all-time closing low of 88.19 (provisional). The sharp fall of 61 paise came amid escalating trade frictions with the US, month-end dollar demand and sustained foreign fund withdrawals.Dealers said the currency was under continuous stress after Washington imposed steep tariffs on Indian exports, even as weak domestic equities added to the pressure, PTI reported.Opening at 87.73 in the interbank forex market, the rupee slipped steadily to touch the day’s trough of 88.33 before clawing back marginally to settle at 88.19. On Thursday, it had ended at 87.58 against the greenback.This is the first occasion that the rupee has breached the 88-level on a closing basis. Earlier, it had tested 87.95 intra-day on February 10, 2025, and had closed at 87.88 on August 5, 2025.“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 bulletin released a day earlier, cautioned that uncertainties surrounding US trade policies pose risks to India’s demand outlook, though it noted that inflation projections for the near term look more favourable than expected.Commerce and Industry Minister Piyush Goyal said the government would soon announce measures to deepen India’s global trade presence and strengthen exports. He assured exporters of full support in coping with the uncertainty arising from US tariffs.From August 27, the US has imposed a 50 per cent duty on Indian goods, a move expected to hit labour-intensive segments such as textiles, leather, footwear and shrimp.The dollar index, which measures the greenback against a basket of six major currencies, gained 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.In global commodities, Brent crude fell 0.76 per cent to $68.10 a barrel in futures trade.Back home, equity benchmarks ended in the red. The Sensex slid 270.92 points to 79,809.65, while the Nifty dropped 74.05 points to 24,426.85.According to exchange data, FIIs sold equities worth Rs 3,856.51 crore on Thursday, adding to the rupee’s woes.
