Rupee Breaches 88 Mark for First Time, Closes at Record Low of 88.19 Against Dollar

Mumbai, August 29 — The Indian rupee fell to an all-time low against the dollar on Friday. It breached the 88-mark for the first time and closed at 88.19, down 61 paise from its previous close. The sharp fall comes as trade tensions escalated between India and the US amid the new tariffs introduced by the Trump-led US government on Indian goods.

Rupee Hits Historic Weakness

As of August 29, 2025, the rupee opened at 87.73 in the interbank foreign exchange market but slipped to 88.19 by the close. The fall is the steepest low since the rupee’s intra-day low of 87.95 on February 10, 2025. Earlier this month, the rupee closed at 87.88 on August 5. The pressure on the currency is mainly from the US decision to impose a steep 50 per cent tariff on Indian goods from August 27. The decision has caused a downfall across all major sectors, including textiles, leather, footwear, and shrimp.

Other Factors Contributing To Decline

Along with the US tariff hikes, there are a few more related factors that have caused the decline in the currency.

• FII Outflows: Foreign Institutional Investors (FIIs) sold equities worth Rs 3,856.51 crore on Thursday.
• Equities Under Pressure: Domestic indices ended lower, with both major indices, Sensex and Nifty, falling significantly.
• Global Cues: The economy all across the globe is in an overall volatile state post the US government announcement regarding additional tariffs. The decision has caused several nations to readjust their international relations and standing treaties. The Asian market has taken the worst of the blow.

Government Response

In light of the volatile state of the market, Commerce and Industry Minister Piyush Goyal has made a statement where he assured that the government is preparing fresh measures to expand India’s domestic outreach and global foray. The minister further assured that exporters will be provided with full backing and support by the government to navigate global uncertainties.

Outlook

The Reserve Bank of India has highlighted that persisting uncertainties around US trade policies pose a downside risk to domestic demand. It further stated that the near-term inflation outlook has turned more benign than previously anticipated. What this means for the economy is that this is a crucial moment, especially for policymakers. They must weigh steps to stabilise investor confidence and support external trade.

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