FX.co ★ Indian Rupee Pressured as Tariff Concerns Mount

The Indian rupee slipped to just below 87.65 against the US dollar on Tuesday, experiencing its fourth consecutive day of losses. This downward trend is primarily driven by market apprehension over impending tariffs. With the US poised to impose an additional 25% duty on Indian goods starting Wednesday, the rupee is expected to remain under pressure. Efforts toward a peace agreement between Ukraine and Russia appear to have stalled, bolstering the likelihood that the US will proceed with these tariffs without any negotiation to forestall them. Further compounding the situation, traders noted that the Reserve Bank of India might strategically allow the currency to depreciate to benefit exporters and maintain competitive edge. Despite these challenges, RBI Governor Sanjay Malhotra emphasized that the central bank continues to prioritize its growth objectives, noting that approximately 45% of export sectors remain unaffected by US actions.