Rupee Settles at 87.53, Gains 12 Paise Amid Softening Crude and RBI Intervention

Tariff Tensions Persist but Currency Recovers for Second Day

Mumbai, August 1 — The Indian rupee appreciated by 12 paise to close at 87.53 (provisional) against the US dollar on Friday, supported by a decline in global crude oil prices and likely intervention by the Reserve Bank of India (RBI), even as fresh US tariff impositions continued to stoke concerns in global markets.

The improvement in the rupee comes on the heels of Thursday’s recovery, when the local currency had bounced back by 15 paise after hitting an all-time low.

Tariffs from the US Trigger Volatility

Currency markets have been on edge since US President Donald Trump announced a 25 per cent tariff on Indian exports, alongside an additional penalty for New Delhi’s purchases from Russia. While August 1 marked the deadline for the tariff order, the new levies will officially take effect from August 7.

The announcement triggered a risk-off sentiment, raising fears of deeper volatility and further pressure on the rupee. However, the Indian currency managed to regain ground intraday, aided by softer oil prices and suspected RBI activity in the forex market.

Intra-Day Movement and Market Drivers

At the interbank foreign exchange, the rupee opened at 87.60, touched an intra-day high of 87.20, and finally settled at 87.53, up 12 paise from the previous close of 87.65.

Brent crude futures eased by 0.31 per cent to USD 71.48 per barrel, reflecting subdued global demand expectations due to higher US tariffs.

The US dollar index rose 0.26 per cent to 100.23, buoyed by mixed-to-positive US economic data.

Equity Market Weakness Amid Global Uncertainty

On the equity front, markets remained under pressure. The BSE Sensex fell 585.67 points, or 0.72 per cent, to close at 80,599.91, while the NSE Nifty declined 203 points, or 0.82 per cent, to 24,565.35.

Foreign institutional investors (FIIs) offloaded Indian equities worth ₹5,588.91 crore on Thursday, continuing the trend of capital outflows amid global trade concerns.

Positive Macro Data Fails to Offset Sentiment

India’s manufacturing activity showed strength in July, with the HSBC India Manufacturing PMI rising to 59.1, its highest level in 16 months, up from 58.4 in June. The expansion was supported by faster growth in new orders and output.

Separately, data from the Controller General of Accounts revealed that the centre’s fiscal deficit stood at ₹2.80 lakh crore, or 17.9 per cent of the FY26 target, as of June-end. This compares to 8.4 per cent of Budget Estimates during the same period in the previous fiscal year.

While macro indicators remain supportive, global trade tensions and capital market volatility continue to weigh on investor sentiment and currency stability.

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