The Indian rupee opened 5 paise higher at 88.1075 on September 5 after the dollar index eased on rising bets on a rate cut by the US Federal Reserve, compared to the previous close of 88.1525 against the greenback.
The dollar index, a measure of the greenback's strength against a basket of six major currencies, fell to 98.112 in early trade from the previous close of 98.347.
"Global uncertainty, mixed U.S. data, and potential Fed policy shifts could provide the rupee with some room for appreciation," said Amit Pabari, managing director at CR Forex Advisors.
Year-to-date, the rupee has lagged its Asian peers, weakening by about 3% in 2025, while the Korean won and Chinese yuan have strengthened by roughly 5.5 percent and 2 percent, respectively. This underperformance points to the currency’s vulnerability, particularly amid the lingering effects of Trump's tariffs, whose economic strain is unlikely to dissipate quickly, Pabari added.
"USD/INR may try to move below 88 but that is expected to be short-lived due to the strong client interest in buying on dips," Reuters quoted a forex trader with a large foreign bank.
On September 4, Bloomberg News report have said that Indian exporters said they will lobby the central bank to allow them to temporarily convert proceeds from their US business at a rupee rate that’s 15% lower than current levels, to help cushion the blow from President Donald Trump’s punitive tariffs.
Exporters are seeking a rupee exchange rate of around 103 per dollar for US earnings, Pankaj Chadha, chairman of the Engineering Export Promotion Council of India, said in a telephonic interview. The rupee is currently close to the record low of 88.33 to the dollar.
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