Indian rupee slips to fresh low of 88.3613 against dollar on likely foreign selling, tariff pressure

Indian rupee

The Indian rupee slipped to a fresh low of 88.3613 against the US dollar during mid-day trade on September 5, weighed down by foreign outflows in equities and ongoing pressure from Trump’s tariffs, amid some reports of RBI intervention to curb sharper losses.

Earlier, the domestic currency opened 5 paise higher at 88.1075 against the US dollar as compared to a previous close of 88.1525 against the greenback.

"The move comes amid persistent foreign portfolio outflows and a resurgence of global trade frictions," said Amit Pabari, managing director at CR Forex Advisors said.

Dilip Parmar, Research Analyst, HDFC Securities said rupee’s fall has come at a time of renewed concerns over US tariffs on Indian exports. The "spike on USD/INR was caused by worries of higher tariffs on India but state-run banks stepped in over 88.30 to cap losses, most likely on behalf of the Reserve Bank of India," Reuters quoted a senior forex trader with a bank.

A likely dollar-selling intervention by the Reserve Bank of India may have curbed sharper losses, Reuters reported.

Year-to-date, the rupee has lagged its Asian peers, weakening by about 2.85 percent in 2025, while the Korean won and Chinese yuan have strengthened by roughly 5.74 percent and 2.30 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.

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.