The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally 0.04% to 98.81. File
| Photo Credit: Reuters
The rupee depreciated 29 paise to 87.95 against the U.S. dollar in early trade on Tuesday (August 5, 2025), a tad above the crucial 88/$ level, after U.S. President Donald Trump’s latest salvos targeting India.
Forex traders said the Indian rupee was under pressure and may continue to remain under pressure during this week after Mr. Trump said he may announce higher tariffs for India for continuing to buy Russian oil.
In a fresh trade threat against India, Mr. Trump on Monday (August 4, 2025) said he will “substantially” raise U.S. tariffs on New Delhi, accusing it of buying massive amounts of Russian oil and selling it for big profits.
On August 1, Mr. Trump signed an Executive Order titled ‘Further Modifying The Reciprocal Tariff Rates’, raising tariffs for over five dozen countries, including a steep 25% for India.
At the interbank foreign exchange market, the rupee opened on a weak note a tad above the sensitive 88 per U.S. dollar level at 87.95 against the American currency, registering a decline of 29 paise over its previous close.
On Monday (August 4, 2025), the rupee depreciated 48 paise to close at 87.66 against the U.S. dollar.
The rupee has touched a record intra-day low of 87.95 on February 10, 2025.
Last week, Mr. Trump mounted a sharp attack on India and Russia for their close ties and said the two countries can take their “dead economies down together”, a remark which prompted New Delhi to say that India is the world’s fastest-growing major economy.
Mr. Trump had earlier announced a 25% tariff on imports of Indian goods along with an unspecified “penalty” for buying the “vast majority” of Russian military equipment and crude oil.
Meanwhile, Brent crude prices fell 0.28% to $68.57 per barrel in futures trade, after OPEC+ agreed to hike another large output increase in September, adding to oversupply concerns after U.S. data showed lacklustre fuel demand.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally 0.04% to 98.81.
“The dollar could from here go to a broader downtrend given U.S. policy-making uncertainty and an economy that is finally showing the cracks,” Mr. Bhansali said.
Meanwhile, investors remain cautious ahead of the RBI monetary policy decision this week.
The RBI Governor Sanjay Malhotra-headed rate-setting panel on Monday (August 4, 2025) started the three-day deliberations to decide the next bi-monthly monetary policy.
The six-member Monetary Policy Committee (MPC) is scheduled to announce the next bi-monthly policy rate on Wednesday (August 6, 2025).
In the domestic equity market, Sensex declined 200.40 points or 0.25% to 80,818.32, while Nifty fell 58.90 points or 0.24% to 24,663.80.
Foreign institutional investors (FIIs) offloaded equities worth ₹2,566.51 crore on a net basis on Monday (August 4, 2025), according to exchange data.
Published – August 05, 2025 11:12 am IST
