FX.co ★ Rupee Steadies on Tariff Concerns, CPI Data Eyed

The Indian rupee stabilized around 89.9 against the USD, maintaining a narrow trading range as investors anticipate the release of inflation data next week for insights into policy direction. At the same time, escalating tariff tensions and capital outflows from equity markets have continued to exert pressure on the currency. In a recent development, U.S. President Donald Trump has approved a bipartisan sanctions bill that could impose tariffs as high as 500% on nations importing Russian oil, targeting countries such as India, China, and Brazil. Republican Senator Lindsey Graham indicated that the sanctions bill might reach a congressional vote as soon as next week, thereby heightening market uncertainty. The proposed tariffs, coupled with sustained foreign investment outflows and the Reserve Bank of India’s short forward positions, have collectively pressured the rupee, despite sporadic dollar sales by the central bank. Looking ahead, the inflation figures for December, slated for release next week, are expected to show an increase for the second consecutive month to an annual rate of 1.5%, remaining below the Reserve Bank's medium-term target of 4% for the eleventh consecutive month.