Puzzle-shaped 100 American dollar banknote and gold-colored Indian Rupee symbol. On a charcoal green-colored background. Horizontal composition with copy space. Isolated with clipping path.
| Photo Credit:
Baris-Ozer
The possibility of Trump slapping 20-25 per cent tariff on India’s exports to the US spooked the rupee, which saw its biggest single day drop in three months, closing about 61 paise lower on Wednesday.
With the President Donald Trump announcing a 25 per cent tariff plus a (“Russia”) penalty on India’s exports to the US (with effect from August 1st) after trading hours, the Indian currency is expected to further come under pressure, say market experts.
The rupee closed at 87.4250 per US dollar, a five-month low, against the previous close of 86.82. The rupee opened weaker at 87.10 per dollar.
In intraday trades, the Indian currency sank to a low of 87.5125 and tested a high of 87.07.
“Concerns over trade deal with the US, the dollar gaining strength over the last few days and Trump’s threat to impose penalty on India for procuring energy and military equipment from Russia weighed on the rupee. Further, there are also FPI-related outflows from the Indian markets,” said V Rama Chandra Reddy, Head – Treasury, Karur Vysys Bank.
Dilip Parmar, Senior Research Analyst, HDFC Securities, obseved that the sharp depreciation in the rupee was primarily driven by increased month-end dollar demand and outflows from foreign funds.
Adding to the negative sentiment, comments from Trump, suggesting that India could face tariffs of 20-25 per cent, which further weighed down the rupee.
Parmar said the breaching of the psychological level of 87, coupled with a technical breakout, spurred greater dollar demand from importers and triggered short covering.
Published on July 30, 2025
