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Rupee weakens on rising trade tensions with US

05 Aug 2025 Evaluate

The Indian rupee weakened against the US dollar on Tuesday weighed down by escalating U.S.-India trade tensions spurred by President Trump's tariff threats. Trump on Monday said he will ‘substantially’ raise US tariffs on Indian goods, accusing the country of buying massive amounts of Russian oil and selling it for big profits. Furthermore, sustained foreign fund outflows and softer American currency also contributed to the fall in the local unit. Foreign institutional investors (FIIs) offloaded equities worth Rs 2,566.51 crore on a net basis on Monday, exchange data showed. However, some falls were limited by fall in crude oil prices amid looming trade tensions. Meanwhile, investors remain cautious ahead of the RBI monetary policy decision this week.

The partially convertible currency is currently trading at 87.80, weaker by 16 paise from its previous close of 87.66 on Monday. The currency touched a high and low of 87.95 and 87.75 respectively.

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