Rupee rises 40 paise to 87.25 against U.S. dollar in early trade

The rupee appreciated 40 paise to 87.25 against the U.S. dollar in early trade on Friday (August 1, 2025), amid lower crude prices and suspected RBI interventions as the U.S.’s imposition of a 25% tariff on Indian exports heightened investors’ concerns.

Forex traders said the U.S.’s imposition of a 25% tariff on Indian exports triggered risk-off sentiment and heightened concerns regarding further rupee depreciation.

Moreover, investors are focused on U.S. President Donald Trump’s imposition of new, and mostly higher tariffs on U.S. trading partners beginning August 1.

At the interbank foreign exchange market, the rupee opened at 87.60 and touched an early high of 87.25 against the greenback, registering a gain of 40 paise from its previous close.

On Thursday, the rupee recovered 15 paise from an all-time low level to close at 87.65 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.07% to 100.03.

“The dollar headed for its best week in almost three years against its major peers, maintaining a momentum on Friday as Donald Trump imposed new tariff rates on dozens of trading partners,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Brent oil prices fell 0.97% to $72.53 per barrel as traders digested the impact of new, higher U.S. tariffs that may curtail economic activity and lower global fuel demand.

“On Thursday, the rupee made a low of 87.75 but closed at 87.5950 as RBI stepped in to cool off the market,” Bhansali said.

“The Indian rupee, if protected by the Reserve Bank of India [RBI], may soon see levels of 87.00 in the days to come, but needs a close watch and on RBI’s presence to keep it in a tightish range,” he said.

In the domestic equity market, Sensex declined 145.71 points or 0.18% to 81,039.87, while Nifty fell 64.70 points or 0.26% to 24,703.65.

Foreign institutional investors (FIIs) offloaded equities worth ₹5,588.91 crore on a net basis on Thursday, according to exchange data.

On the domestic macroeconomic front, the centre’s fiscal deficit stood at 17.9% of the full-year target at the end of June, according to data released by the Controller General of Accounts (CGA) on Thursday.

It was at 8.4% of the Budget Estimates (BE) of 2024-25 in the first three months of the previous financial year.

In absolute terms, the fiscal deficit, or gap between the government’s expenditure and revenue, was ₹2,80,732 crore in the April-June period of the 2025-26 fiscal year.