Rupee opens 17 paise up at 87.51 against the dollar on likely RBI support

Indian rupee

Indian rupee opened 17 paise up on August 28 on likely support by the Reserve Bank of India (RBI) after an additional 25 percent US tariffs came into effect.

The local currency opened at 87.51 against the US dollar, as compared to 87.68 against the greenback at previous close.

"The rupee remains under pressure after slipping past 87.70. The 87.80–88.00 zone is critical, as the RBI has often stepped in around this level to prevent sharper weakness. On the other hand, support is seen at 87.40, and if the rupee holds here, a short-term recovery could follow, giving the currency some breathing room," said Amit Pabari, managing director at CR Forex Advisors.

United States has issued a draft order over the implementation of additional 25 per cent tariff on Indian imports – which President Donald Trump had announced earlier – beginning August 27.

According to the draft notice released Monday by the Department of Homeland Security, the additional tariffs will cover Indian products “that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 27, 2025.”

The notice explained that the higher levies were linked to “threats to the US by the government of the Russian Federation,” with India targeted in line with that strategy.

Ties between New Delhi and Washington have soured after US President Donald Trump doubled tariffs on Indian exports to 50 per cent -- including a fresh 25 per cent duty, in response to India’s purchase of Russian crude oil.

"A range of 87-88 continues in the meanwhile with a glimmer of chance of rupee moving to 86.50 in the medium term," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

The rupee, like most Asian currencies, was likely supported by bets of a rate cut by the US Federal Reserve when it meets in September after chairman Jerome Powell's dovish pivot at Jackson Hole last week, say experts.