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The rupee recovered 13 paise from its all-time low closing level to 86.98 against the US dollar in early trade on Tuesday (Feburary 4, 2025), after President Donald Trump agreed to pause tariffs on Mexico and Canada for 30 days.
Forex traders said the US dollar index, which had surged past 109.88 level, retreated to 108.74 after Trump announced the temporary pause on tariffs.
At the interbank foreign exchange, the rupee opened at 86.98 against the greenback, registering a rise of 13 paise from its previous close.
On Monday, the rupee plunged 49 paise to close at an all-time low of 87.11 against the US dollar.
“The Indian rupee opened near to 86.98 on Tuesday after relief from Mr. rump’s tariffs overnight on reaching an agreement with Canada and Mexico.
“The range for the day is expected between 86.80 to 87.20 with dips to be bought. Premiums rose on Monday after the Reserve Bank of India set the cut off for 6 months swap higher than market expectations,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
Mr. Trump on Monday (February 3, 2025) held off on his tariff threats against Mexico and Canada for 30 days after they pledged to boost border enforcement.
Meanwhile, Finance Minister Nirmala Sitharaman on Monday (February 3, 2025) said the value of Indian rupee is market-determined, and there has been no devaluation, which is a feature of a fixed exchange rate regime.
The rupee has been falling in recent weeks, and on Monday (February 3, 2025) touched an all-time intraday low of 87.29 against the American currency.
Reacting to the development, Finance Secretary Tuhin Kanta Pandey said there is no concern over the rupee value and the Reserve Bank of India is managing the volatility of the local currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22 per cent lower at 108.74.
Brent crude, the global oil benchmark, fell 0.57 per cent to USD 75.54 per barrel in futures trade.
Published – February 04, 2025 10:58 am IST
