Rupee falls to all-time low as dollar demand surges

The rupee fell to a fresh low on Friday (August 29) as strong dollar demand from importers and foreign portfolio investors (FPIs) weighed on the currency. Traders said the Reserve Bank of India (RBI) was seen supplying dollars in early trade, but overwhelming demand pushed the rupee further down, particularly after it crossed the 88-per-dollar mark.

At the interbank foreign exchange market, the rupee opened at 87.73 against the US dollar in morning trade, compared with Thursday’s close of 87.58.

The fall comes amid continued foreign fund outflows and persistent concerns over the impact of US tariffs.

“Market sentiment remains fragile due to the impact of US tariffs and selling by FPIs to the tune of ₹34,733 crore of Indian equities in August 2025,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
The RBI, in its latest bulletin on Thursday, warned that uncertainties around US trade policies pose risks to domestic demand, though it said the near-term inflation outlook has improved compared to earlier expectations.Government officials said plans are underway to support exporters through measures such as export promotion missions and loan moratoriums, to mitigate the impact of US tariffs.

Meanwhile, the dollar index rose 0.18% to 97.99, while Brent crude futures slipped 0.66% to $68.17 per barrel.

“Calibrated rupee depreciation over the next few months isn’t necessarily a bad thing,” said Sajjid Chinoy, Head of Asia Economic Research at JPMorgan.

-With PTI inputs