Rupee Slips 18 Paise to 87.76 Against U.S. Dollar Amid Persistent Market Pressures
August 29, 2025 | Mumbai
The Indian rupee weakened by 18 paise to trade at 87.76 against the U.S. dollar in early market hours on Friday, August 29, 2025, signaling ongoing stress from foreign capital outflows and heightened demand for the American currency towards the month’s end. This depreciation underscores the challenges confronting the domestic currency amid global and domestic economic headwinds.
Market Dynamics and Influences
According to foreign exchange traders, the rupee remains under continuous strain, grappling with the effects of tariff measures initiated during the Trump administration. While these tariffs have exerted downward pressure on Indian exports to the United States, a comparatively softer U.S. dollar has provided some relief, tempering the rupee’s decline.
The rupee commenced trading at 87.73 per dollar before sliding to 87.76, marking a marginal weakening of 18 paise compared to the previous session’s close. Notably, the currency had gained 11 paise to settle at 87.58 against the dollar on Thursday, August 28, indicating volatile trading sentiments.
Expert Viewpoint on Currency Pressure
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, emphasized that “market sentiment remains fragile due to the impact of U.S. tariffs and selling by foreign portfolio investors (FPIs), who have offloaded Indian equities worth approximately ₹34,733 crore in August 2025 alone.”
Bhansali added that the ongoing U.S. tariffs are expected to dampen Indian exports, widen the trade deficit, and intensify pressure on the rupee. This scenario is likely to elevate import costs, thereby contributing to domestic inflationary pressures.
Outlook and Government Measures
Market watchers anticipate that the rupee will fluctuate within the range of 87.40 to 87.90 against the dollar for the day, with close monitoring of interventions by the Reserve Bank of India (RBI) aimed at stabilizing the currency.
In its recent bulletin released on Thursday, August 28, 2025, the RBI highlighted persisting uncertainties related to U.S. trade policies as a downside risk to overall demand within the Indian economy. However, the central bank noted that the near-term inflation outlook has become more benign than previously anticipated.
On the policy front, Indian government officials have revealed ongoing efforts to support exporters hit by the 50% U.S. tariffs. Measures under consideration include launching export promotion missions and granting moratoriums on export-related loans to mitigate adverse impacts. Officials view the situation as both a cautionary signal and an impetus for diversifying India’s export portfolio.
Global Currency Trends
The broader U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, registered a rise of 0.18% to 97.99, reflecting cautious investor sentiment amid global trade uncertainties.
Conclusion
The rupee’s early session decline on August 29 reflects continued vulnerability to international trade tensions and capital flow dynamics. Market participants and policymakers alike remain vigilant, balancing currency stability with broader economic considerations in an uncertain global environment.
— Smart Money Mindset reporting from Mumbai