Indian rupee ends record low at 88.21 against US dollar on US tariffs impact worries

Indian rupee

Indian rupee ended record low on August 29 outflows from equity markets, Trump’s tariff pressure on India, month end oil demand and Rupee-Yuan dynamics, currency experts said.

The domestic currency ended 57 paise down at 88.2063 against the US dollar, as compared to 87.6963 at open and 87.6338 at previous close against the greenback.

“Outflows from equity markets (August equity outflows are to the tune of Rs 29,000 crore and July equity outflows around Rs 17,000 crore), Trump’s tariff pressure on India, month end oil demand and Rupee-Yuan dynamics are all creating pressure on Rupee,” said Kunal Sodhani, Head- Treasury at Shinhan Bank.

The RBI, in its latest bulletin on August 28, warned that uncertainties around US trade policies pose risks to domestic demand, though it said the near-term inflation outlook has improved compared to earlier expectations.

Further, Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities at the rupee hit an all-time low of 88.20, falling by another 0.60 (0.70%), as pressure mounted after the US implemented tariffs on Indian products, raising concerns over a widening fiscal deficit. While the upcoming GST council decision is expected to lend some support, markets are awaiting clarity on the final GST changes before taking a decisive view.

Indian rupee opened 6 paise weaker today after a surge in dollar index, as foreign selling in equities and the economic impact of US tariffs weighed on the sentiment.

The rise in Dollar index comes as data showed the inflation-adjusted US GDP expanded faster than initially estimated in the second quarter, underscoring resilience in consumer spending.

US Treasury Secretary Scott Bessent had on Wednesday repeated President Donald Trump’s criticism of India’s 'profiteering' from Russian oil purchases, while voicing optimism that New Delhi and Washington would eventually reach a trade agreement despite the imposition of steep tariffs.

“At the end of the day, we (India and the US) will come together,” Bessent told Fox Business Network, as Washington’s 50 per cent tariffs on Indian goods took effect.