Rupee Hits Record Low of ₹88.27 Against US Dollar Amid Tariff Concerns

Mumbai, September 5, 2025: The Indian rupee fell 15 paise to close at a fresh record low of ₹88.27 against the US dollar on Friday, extending its recent slide. The currency came under pressure as foreign portfolio outflows continued and renewed fears of possible US tariffs on India’s trade, particularly the IT sector, weighed on sentiment. Despite easing crude oil prices and a softer dollar index, the rupee struggled to recover, reflecting persistent vulnerability to global and domestic factors.

Intraday Movement

At the interbank foreign exchange, the rupee opened lower at 88.11 and went lower to an intraday low of 88.38 before closing at 88.27, breaking its previous record low of 88.15 on September 2. On Thursday, the currency closed at 88.12.

Key Market Drivers

Traders observed that despite a softer dollar index and declining global crude prices, the rupee struggled to find support. Lingering speculation over potential US tariffs on India’s IT sector weighed on sentiment. Even after the rumour was denied, the currency’s recovery remained muted. Continued foreign portfolio outflows added pressure, with FIIs offloading equities worth ₹106.34 crore on Thursday, according to exchange data.

Broader Market Context

Broader market trends showed mixed movements on Friday. The Dollar Index declined by 0.31% to 98.03, while Brent Crude futures slipped 0.25% to USD 66.82 per barrel. Indian equities witnessed marginal changes, with the Sensex falling 7.25 points to 80,710.76 and the Nifty rising 6.70 points to 24,741. Market participants noted that the Reserve Bank of India may intervene to curb volatility, but persistent FPI outflows and tariff-related concerns continued to weigh on the rupee.

The Indian rupee hit a record low of ₹88.27 against the US dollar amid ongoing foreign fund outflows and tariff-related concerns. Despite a softer dollar index and falling crude prices, domestic currency recovery remained limited. Broader markets showed mixed movements, while the Reserve Bank of India’s potential interventions and global developments continued to influence currency and equity trends.

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