MUMBAI: The Indian rupee hit a lifetime low on Friday, pressured by worries over US tariffs, leaving traders on edge even as likely central bank intervention helped limit losses.
The Asian currency fell 0.14% to 88.2650 against the U.S. dollar, from 88.1450 in the previous session.
Friday’s move ended a volatile week, during which the rupee largely stayed below the 88-mark, weighed down by persistent portfolio outflows and U.S. tariff-related uncertainties.
Washington imposed a 50% tariff on key Indian exports from August 27 over what the White House sees as India’s opportunistic purchases of cheap Russian oil.
Indian rupee logs worst losing streak in 6 months
The rupee, which slipped past the 88-mark for the first time last week, slipped to its record low of 88.36 on Friday, as foreign banks and oil companies bought dollars and traders covered speculative positions.
Foreign portfolio investors have pulled out $1.4 billion from Indian equities so far in September, taking the total outflow so far this year to over $16 billion.
On the day, the Reserve Bank of India likely intervened in the forex market through state-run banks, which were spotted selling dollars above the 88.30 mark, traders said.
Market participants expected support for the rupee at 88.70 levels, but the RBI came in much earlier to cap the slide, said Apurva Swarup, a vice president at Shinhan Bank.
“Uncertainty around U.S. tariff is still spooking the market even as the Indian government is devising ways to counter the impact,” Swarup said.
India hopes to conclude a bilateral trade agreement with the U.S. by November. Meanwhile, Asian currencies strengthened against the dollar as traders positioned for a Federal Reserve rate cut this month. The Korean won led gains.
The dollar index was 0.22% lower at 98.014. Traders await the U.S. nonfarm payrolls data, due after market hours.
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