Rupee Plunges to Four-Month Low of 87.44 Against Dollar

New Delhi: The Indian rupee plunged to its four-month low of 87.44 against the US dollar today, largely thanks to uncertainty over trade negotiations between the US and India.

Trump's "reciprocal tariff" regime is scheduled to kick in from August 1.

Reuters has reported that dollar demand from importers and weakness in foreign portfolio flows are also responsible. This is the weakest that the dollar has been since March. The last time the currency breached the 87-mark at the open was on March 13, 2025.

On July 29, while returning from Scotland, US president Trump said that the India trade deal has not been finalised.

Then, responding to a question on whether the US may impose tariffs between 20-25% on India, Trump said, "Yeah, I think so. They [India] are my friend and he [Prime Minister Narendra Modi] is my friend...India has charged basically more tariffs than almost any other country...over the years...you just can't do that."

Talks on a bilateral trade deal have so far not yielded results. A US negotiators' team is expected to visit New Delhi in the second half of August next.

Reuters has quoted a forex salesperson with a large foreign bank as having said that the Reserve Bank of India is expected to "continue smoothening volatility while chances of firm intervention to lift the currency are low due to the uncertain environment."

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