The Indian rupee traded in a tight range and fell 5 paise to 87.63 against the US dollar amid trade uncertainty as India’s tariff talks with the US stalled and a firm US dollar backdrop.
Forex traders also observed that the Reserve Bank of India is protecting the rupee at around the 87.95 level, while sustained foreign fund outflows are dragging the local unit lower.
At the interbank foreign exchange market, rupee opened at 87.56, then touched an intra-day low of 87.63 against the US dollar in initial trade, lower by 5 paise from its previous close.
On Thursday, the domestic unit had settled 14 paise higher at 87.58 against the US dollar.
Also Read: Rupee slips 16 paise to close at 87.82 against US dollar
Amit Pabari, MD, CR Forex Advisors agreed that the reason for the Indian rupee to remain largely unchanged in Thursday’s session despite volatility from additional US tariffs was that the central bank had helped contain the volatility.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.27 per cent to 98.13.
Brent crude, the global oil benchmark, was down 0.17 per cent at USD 66.32 per barrel in futures trade.
Pabari predicts some pullback by the rupee, toward the 87.50 range in the near term.
"On the upside, resistance is seen at 87.70, with depreciation pressures still lingering amid persistent trade uncertainty and a firm US dollar backdrop," he added.
On the domestic equity market front, the Sensex declined 242.24 points to 80,381.02 in early trade, falling nearly 600 points in mid-day trading; while the Nifty dropped 54.85 points to 24,541.30.
Foreign institutional investors (FIIs) offloaded equities worth ₹4,997.19 crore on a net basis on Thursday, according to exchange data.
Worsening the deadlock over trade with India, US President Donald Trump ruled out the possibility of trade negotiations until the current standoff is resolved.
“No, not until we get it resolved,” Trump said in the Oval Office on Thursday in response to a question on whether he expects increased trade negotiations with India since he has announced 50 per cent tariffs on the country.
Last week, the President had announced 25 per cent reciprocal tariffs on India that came into effect from August 7. The additional 25 per cent duty will come into effect after 21 days or August 27.
Follow us
