Rupee recovers 22 paise from all-time low to close at ₹87.58 against US dollar

The rupee recovered 22 paise from its all-time low to ₹87.58 (provisional) against the US dollar on Thursday, amid lower crude prices and suspected RBI interventions, after US President Donald Trump's announcement of 25% tariffs on Indian imports and a penalty for buying Russian Crude.

Forex traders said the rupee, after plunging 89 paise, logging its steepest single-day fall in over three years on Wednesday, recovered some lost ground but the broader outlook remains cautious.

At the interbank foreign exchange, the domestic unit opened at ₹87.66 against the greenback, touched an intra-day low of ₹87.74 and a high of ₹87.51 against the American currency.

At the end of Thursday's trading session, the local unit settled at ₹87.58 (provisional), down 22 paise over its previous closing price.

Forex traders said following the US' imposition of a 25% tariff on Indian exports triggered risk-off sentiment and heightened concerns regarding further rupee depreciation.

On Wednesday, the rupee closed at an all-time low of ₹87.80 against the US dollar after America announced a sweeping 25% tariff on Indian imports in the absence of a trade deal ahead of the August 1 deadline.

It was not clear if the 25% duty will be imposed in addition to the existing 10% baseline tariff. The 10% tariff, which currently applies to most Indian goods barring a few, was announced by Trump in all countries on April 2. Also, the exact quantum of the penalty is unclear.

Meanwhile, negotiations for the proposed bilateral trade agreement are on as a US team is visiting New Delhi on August 25 for the sixth round of talks.

The top officials of the two countries concluded the fifth round recently in Washington.

In the domestic equity market, the 30-share BSE Sensex declined 296.28 points, or 0.36%, to close at 81,185.58, while the Nifty fell 86.70 points, or 0.35%, to settle at 24,768.35.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.03% to 99.84.

Brent oil prices fell 0.67% to USD 72.75 per barrel.

Meanwhile, the US Fed held interest rates steady and signalled it is too early to consider rate cuts, which has supported the dollar throughout the month of July.

Foreign institutional investors (FIIs) offloaded equities worth ₹850.04 crore on a net basis on Wednesday, according to exchange data.