The rupee opened flat on August 7 despite US President Trump's threat of ‘secondary sanctions’ after slapping additional 25% tariff on Indian exports to America, starting the session at 87.7275 against the US dollar as compared to 87.7350 at previous close.
"For USD INR, 87.50 acts as a base while 87.95 is the first important resistance," said Kunal Sodhani, Head of Treasury at Shinhan Bank.
During a press briefing at White House, Trump was asked why India was being singled out for purchasing Russian oil when many other countries, including China, do the same. In response, Trump said, "It's only been 8 hours. So let's see what happens. You're going to see a lot more...You're going to see so much secondary sanctions.”
The US President also hinted that similar sanctions could be imposed on China as well. "Could happen. Depends on how we do. Could happen."
His comments came after signing an executive order on August 6 imposing an additional 25 per cent tariff on imports from India. Trump cited matters of national security and foreign policy concerns, as well as other relevant trade laws, for the increase, claiming that India's imports of Russian oil, directly or indirectly, pose an 'unusual and extraordinary threat' to the United States.
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