Rupee closes at all-time low against dollar on tariff concerns

The rupee slumped 36 paise to close at an all-time low of 88.47 (provisional) against the US dollar on Thursday (September 11), as ongoing tariff tensions between India and the United States added pressure on the domestic currency.Forex traders said a recovery in the US dollar ahead of key inflation data, coupled with foreign fund outflows, further weighed on sentiment. Rising crude oil prices in recent sessions also put additional strain on the rupee.

At the interbank foreign exchange market, the local unit opened at 88.11 and slipped to 88.47 during intraday trade, marking its weakest closing level so far.

On Wednesday (September 10), the rupee had ended at 88.11.
“The rupee is trading near historic lows, pressured by strong dollar demand from importers, external tariff concerns, and market anticipation of US inflation data and Federal Reserve policy,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.He added that higher US–India interest rate differentials were also driving premiums up, with the rupee expected to trade in the 88.25–88.75 range on Friday (September 12).

Meanwhile, the dollar index rose 0.22% to 97.99, reflecting the greenback’s strength against a basket of six major currencies.

Analysts said the rupee may remain under pressure in the near term.

“We expect the currency to trade with a negative bias amid a stronger dollar and continued FII outflows. Importer demand and trade issues with the US could weigh further, although positive domestic equities and ongoing negotiations may lend support at lower levels,” said Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan.

–With PTI inputs