The currency closed 0.3% lower on Friday at 87.5300, against its close of 87.27 in the previous session. It was down 0.02% for the week.
The local unit, which opened at 87.4575 on Monday, saw sharp swings through the week due to domestic and geopolitical developments.
Talks between the U.S. President Donald Trump and the Russian and Ukrainian presidents, coupled with the Indian government’s proposed tax cuts, pushed the rupee above the 87 handle for the first time this month on Tuesday.
However, concerns over tariffs on Indian goods, which are set to take effect on August 27, and importers’ demand for the greenback weighed on the currency on Thursday when it posted its biggest single-day decline in a month.
“Looming U.S. tariffs on Indian goods and criticism over Russian oil purchases kept sentiment weak, with continued downside risk (expected in) the rupee through September,” said Jigar Trivedi, senior currency analyst at Reliance Securities. Meanwhile, the dollar index was up 0.14% at 98.742, as of 3:37 p.m. IST, and inched towards the 99-mark ahead of Powell’s speech at the Jackson Hole symposium later in the day. His comments will be scrutinised for clues on a September rate cut and the policy trajectory for the rest of the year. Investors are pricing in an over 80% chance of a cut next month, but the question is whether Powell will push back against such aggressive expectations. While his recent comments have leaned hawkish, they came before the weaker July jobs report.
Most Asian currencies traded lower on Friday, with the Taiwan dollar and Indonesian rupiah falling sharply against the dollar and leading losses, while the Korean won and Philippine peso climbed in intraday trade.
