Rupee Hits Record Low at 88.18 Against Dollar Amid Trade Uncertainty​

Mumbai, Sep 2, 2025 – The Indian rupee settled at a new all-time low of 88.18 against the US currency on Tuesday, falling 8 paise as volatility in Indo-US trade talks and weak domestic equities weakened sentiment.

Currency Market Movement

At the foreign exchange market for interbanks, the rupee opened weak at 88.14 and fell to an intra-day low of 88.20 before closing at 88.18. This was a fall from Monday’s record high closing at 88.10, when the local currency had also seen its all-time intra-day low of 88.33.

Factors Driving the Fall

Market participants indicated ongoing risks stemming from uncertainty regarding US trade tariffs. Investors are also cautious ahead of essential US economic data, such as ISM manufacturing PMI and the forthcoming non-farm payrolls report.

The volatility is likely to increase further in front of President Donald Trump’s planned speech later tonight.

On the other hand, Brent crude futures rose 1.80% to settle at USD 69.38 per barrel, adding to fears of imported inflationary pressure on the Indian economy.

Equities and FII Outflows

Local equity markets reflected the weak currency sentiment. The Sensex fell 206.61 points to close at 80,157.88, while the Nifty fell 45.45 points to 24,579.60. Foreign Institutional Investors offloaded equities to the tune of ₹1,429.71 crore on Monday, continuing the selling spree.

Trade Negotiations with US

Policy-wise, Commerce and Industry Minister Piyush Goyal reiterated that India and the US are in talks for a bilateral trade deal. The negotiations, which had commenced in March, have witnessed five rounds being completed. The sixth round, however, has been put on hold following the US imposing a 50% duty from August 27 and rescheduling its planned visit.

India has already entered trade pacts with Australia, the UAE, Mauritius, the UK, and the European bloc EFTA. Although new dates have yet to be set for the next round of talks with the US, Treasury Secretary Scott Bessent was optimistic that the two sides would resolve their differences eventually.

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