Rupee dives 61 paise to close at all-time low of ₹88.19 against US dollar

The rupee breached the 88-mark for the first time and closed at an all-time low of ₹88.19 (provisional) against the US dollar on Friday, registering a sharp decline of 61 paise amid heightened Indo-US trade deal tensions.

Forex traders said the rupee is under persistent pressure amid the imposition of steep tariffs by the US compounded with persistent foreign fund outflows and month-end dollar demand.

Moreover, a negative trend in domestic equities dented market sentiments.

At the interbank foreign exchange market, the rupee opened at ₹87.73 against the US dollar, then lost ground and fell to an intra-day low of ₹88.33. The domestic unit settled for the day at an all-time low of ₹88.19 (provisional) against the greenback, registering a sharp fall of 61 paise over its previous close. On Thursday, the rupee rose by 11 paise to close at ₹87.58 against the US dollar.

This is the first time the rupee has breached the 88/US dollar level. On February 10, 2025, the unit had witnessed an intra-day low of ₹87.95 and on August 5, 2025, the domestic unit had settled at ₹87.88 against the greenback.

The Reserve Bank of India, in its latest bulletin on Thursday, said persisting uncertainties related to the US trade policies pose downside risk to the overall demand in the Indian economy, while the inflation outlook for the near-term has become more benign than anticipated earlier.

Commerce and Industry Minister Piyush Goyal on Friday said the government will soon announce various measures to expand the country's domestic outreach and global foray, aiming to boost exports. He also assured exporters of all support in dealing with the current global uncertainties at the trade front, which were caused by the imposition of high tariffs.

The US has imposed a steep 50% tariff on Indian goods entering America from August 27. This high duty is expected to impact exports of certain labour-intensive sectors like textiles, leather, footwear and shrimp.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.14% to 97.94.

Brent crude, the global oil benchmark, was trading 0.76% lower to USD 68.10 per barrel in futures trade. On the domestic equity market front, Sensex dropped 270.92 points to settle at 79,809.65, while the Nifty declined 74.05 points to close at 24,426.85.

Foreign Institutional Investors offloaded equities worth ₹3,856.51 crore on Thursday, according to exchange data.