MUMBAI: The Indian rupee continued its losing streak for a fifth consecutive session on Tuesday as Washington confirmed it will impose an extra 25 percent levy on Indian goods, clouding the outlook for Asia’s third-largest economy.
The fall in the rupee was curbed after dollar sales from banks, likely on behalf of the Reserve Bank of India, traders said.
US Department of Homeland Security on Monday outlined the procedure to implement additional tariff on Indian goods starting Wednesday.
The tariffs risk slowing growth in India as exporters face US duties of up to 50 percent - among the highest imposed by Washington.
Exporter groups estimate that the hikes could affect nearly 55 percent of India’s $87 billion in merchandise exports to the US, while benefiting competitors such as Vietnam, Bangladesh and China.
The rupee ended at 87.68 against the dollar, the lowest level in three weeks, against 87.58 at the previous close. It came within striking distance of its lifetime low of 87.95 hit in February.
“The bias for the rupee is still weak amid imbalance between dollar demand and supply,” said Dilip Parmar, currency analyst at HDFC Securities.
“Looking at the current market conditions, the rupee’s new low is looking imminent. Short term traders will be eyeing trade tariff and GST rate rejig announcement.”
Parmar expects the rupee to see support at 87.90 near term and for gains to be capped at 87.25.
Meanwhile, Asian currencies were mixed, with the dollar index falling after US President Donald Trump ends fired Federal Reserve Governor Lisa Cook over alleged mortgage fraud.
The removal comes amid the president’s regular threats to fire Fed Chair Jerome Powell.
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