Difficult times have come for the Indian currency, which plunged to record lows after US President Donald Trump threatened India. As a result, the dollar surpassed 88 rupees for the first time ever, and this may not be the end.
The rupee fell sharply against the US dollar amid Trump’s threat to impose massive tariffs of no less than 100% on India over its continued purchases of Russian oil.
On August 5, the US currency peaked at 88.1 rupees, reaching an all-time high. At one point, the dollar gained 0.48% against the rupee, but then the situation stabilized. Later, the rate slipped slightly to 87.8 rupees, still marking a 0.16% increase compared to the previous session’s close.
The previous record low for the rupee was in early February 2024, when the dollar reached 87.997 rupees. Although the current drop is slightly worse, analysts note that the situation is not yet critical.
Reuters analysts attribute this latest wave of rupee weakness to growing US pressure on India. The Trump administration insists that New Delhi stop purchasing Russian oil. However, such a move would rupture India’s energy ties with Russia. As a result, New Delhi finds itself caught between two fires: it wants to maintain these ties, but if it continues to ignore US warnings, it risks facing another round of prohibitive import tariffs.
