Rupee hits over two-month low, hurt by geopolitical worries, Trump tariff remark

The rupee extended its losses after Trump's statement, traders said.

The Indian rupee hit its weakest level in more than two months on Tuesday, hurt by worries over geopolitical tensions in the Middle East and U.S. President Donald Trump's remark that pharmaceutical tariffs were coming very soon.

The rupee declined to 86.28 against the U.S. dollar near the end of the trading session, its weakest level since April 9, before closing at 86.24, down 0.2% on the day.

Speaking to reporters on Air Force One on the way back from attending a meeting of G7 leaders, Trump said that pharmaceutical tariffs were coming very soon.

The rupee extended its losses after the statement, traders said. Indian drugmakers earn a significant share of their revenue from the United States.

India's pharma exports to the U.S. stood at $8.73 billion in fiscal year 2024, accounting for about one-third of the industry's overall exports, as per data from government-backed trade body Pharmaceuticals Export Promotion Council of India.

Asian currencies were down between 0.1% and 0.5% while the dollar index was steady at 98.1.

Brent crude oil futures rose more than 1% to $74.30 per barrel with analysts saying that uncertainty over the Iran-Israel conflict would keep prices elevated.

Dollar demand from state-run banks also weighed on the rupee, a trader at a private bank said. "A close over 86.10 indicates that a bullish bias may start to build on USD/INR in the near-term," the trader said.

India's benchmark equity index, the Nifty 50 fell about 0.3%, in line with losses in most regional peers.

While the focus will remain on geopolitical developments in the Middle East, traders are also awaiting the Federal Reserve's policy decision on Wednesday.

With the central bank widely expected to keep policy rates unchanged, its projections for policy rates and commentary from Chair Jerome Powell will be in the spotlight.