The Indian rupee fell sharply on Thursday, opening at 87.69 against the U.S. dollar - down from Wednesday’s close of 87.42 - marking its lowest level in five months.
The decline comes in the wake of escalating geopolitical tensions and trade pressures following U.S. President Donald Trump’s announcement of a 25% tariff on Indian exports and the threat of penalties for importing Russian oil and arms.
Currency markets remained tense, with traders expecting the rupee to move within the 87.25–88.00 range throughout the day.
“Exporters should consider hedging their positions, while importers may wait to hedge and buy at intraday lows,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP.
Adding to the pressure, Brent crude prices rose for the fourth straight session, reaching $72.31 per barrel on Wednesday. The surge is fueled by concerns over potential supply disruptions as a result of secondary sanctions on buyers of Russian oil.
“The rupee has already depreciated over 3% since April, when it touched a high of 83.75,” Bhansali noted. “With oil companies aggressively purchasing dollars ahead of the expected enforcement of U.S. penalties, and the RBI intervening only intermittently, the rupee has struggled to hold ground.”
Although the U.S. dollar index dipped slightly to 99.77, the dollar remains close to a two-month high, supported by strong American economic indicators and the Federal Reserve’s firm policy stance.
Market watchers anticipate that the Reserve Bank of India may intervene more actively if the rupee nears the critical 88-per-dollar mark.