Rupee falls 22 paise to 87.78 against U.S. dollar in early trade

The rupee depreciated 22 paise to 87.78 against the U.S. dollar in early trade on Tuesday (August 26, 2025) after the U.S. issued a draft notice detailing plans to impose an additional 25% tariff on India.

Forex traders said the rupee lost momentum as worries over the looming 25% U.S. tariff on Indian goods, set to take effect from August 27, drove strong dollar demand from importers.

The United States has issued a draft notice detailing plans to implement the additional 25% tariff on Indian products, as previously announced by President Donald Trump.

At the interbank foreign exchange market, the rupee opened at 87.74 against the U.S. dollar, then fell to 87.78, registering a decline of 22 paise over its previous close.

In the initial trade, the rupee touched an early high of 87.69 against the greenback.

On Monday, the rupee pared initial gains to settle 4 paise lower at 87.56 against the U.S. dollar.

“With the bias still tilted toward depreciation, the rupee has already breached the 87.50 mark. The next hurdle stands at 87.80, a level where the RBI has often acted as a strong barrier against further weakness,” CR Forex Advisors Managing Director Amit Pabari said.

Moreover, hopes that the pressure might ease were dashed after signs emerged that Ukraine-Russia peace talks had stalled — reinforcing the view that Washington is unlikely to soften its stance on tariffs, Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 98.38.

“The US dollar index dipped a bit after President Trump fired Federal Reserve Governor Lisa Cook over alleged mortgage fraud, a move that has heightened concerns over the FED Reserve’s independence,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Brent crude, the global oil benchmark, was trading 0.41% lower to $68.52 per barrel in futures trade, as traders weighed the prospects of additional US sanctions on Russia against signs of progress in peace efforts to end the war in Ukraine.

On the domestic equity market front, the Sensex declined 546.87 points or 0.67% to 81,089.04, while the Nifty was trading down 179.05 points or 0.72% to 24,788.70.

Foreign Institutional Investors offloaded equities worth ₹2,466.24 crore on Monday (August 25, 2025), according to exchange data.