The rupee dropped to 88.29 against the US dollar, breaching its prior lifetime low of 87.95 that it had hit in February. The currency then rebounded partially to trade at 88.12 against the greenback at 2:10 p.m. IST following intervention by the Reserve Bank of India (RBI) which resorted to dollar sales, traders said.
"Once the rupee hit 87.60, we saw a lot of demand from importers that were unhedged. They were all expecting RBI to step in, but it didn't, so after the rupee crossed 88, it just kept triggering stop losses," Anindya Banerjee, head of foreign exchange research at Kotak Securities, was quoted as saying by Reuters.
So far, in 2025, rupee is the worst performing currency in Asia, having fallen by 3 per cent.
While the RBI says it expects the country’s economy to grow by 6.5 per cent in the current financial year, economists say US tariffs will trim off at least 60-80 basis points from India’s GDP if they remain imposed for a year.
Also Read: Rupee rises 6 paise as crude oil prices register decline
Although India’s exports to the US account for only 2.2 per cent of the GDP, a massive loss in employment in the severely-hit labour-intensive leather, jewellery, and textiles sectors will have a worsening economic impact, opine experts.
Foreign portfolio investors have also been offloading in equities in heavy measures, deteriorating India’s trade deficit.
Follow us
