Rupee Slides Further, Opens 28 Paise Down at 87.71 Amid US Tariff Action

Market Performance

• The Indian rupee continued its downward trend, opening at 87.71 against the US dollar on July 31, marking a fall of 28 paise from the previous close of 87.43.
• This is the fifth consecutive session of depreciation for the domestic currency.
• It also marks the weakest opening in nearly five months.

Main News: Tariffs & Penalties Spark Pressure

The sharp decline follows an announcement from US President Donald Trump on July 30, imposing a 25% tariff on Indian goods.

In addition to tariffs, Trump also imposed an unspecified penalty on India for its continued purchases of Russian oil and arms.

This geopolitical move has stirred volatility in the forex market, putting further pressure on the rupee.

India was labeled a "friend" by Trump but simultaneously criticized for having some of the "highest tariffs in the world" and "non-monetary trade barriers".

He further condemned India and China for maintaining trade relations with Russia, citing the ongoing global call for peace amid the Ukraine war.

Company Details & Trade Remarks

Trump’s statement, made via Truth Social, highlighted concerns over India's trade practices:

• Accused India of maintaining excessive tariff structures.
• Criticized India’s non-monetary trade barriers as being among the "most strenuous and obnoxious".
• Reiterated dissatisfaction with limited US-India trade volumes despite being strategic partners.

These developments have fueled currency market concerns, resulting in rupee weakness amid global economic uncertainties.

Currency Trend and Performance Metrics

According to Bloomberg data:

• The rupee has depreciated by 0.83% over the past two weeks.
• On a year-to-date basis, the rupee stands out as the worst-performing currency among Asian peers with a 3.25% drop.

This consistent decline has now positioned the rupee under increased scrutiny from traders and market watchers.

Summary

The Indian rupee’s decline to 87.71 underscores rising geopolitical risks and trade tensions following the US administration’s latest move.

With a 25% tariff and added penalties for Russian transactions, market sentiment around the Indian currency remains bearish.

The impact of these developments is visible in the rupee’s performance metrics:

• Fifth straight day of losses
• 28 paise fall in a single day
• 3.25% drop in 2025 so far

As global trade tensions escalate, the rupee is likely to face more pressure unless stabilizing factors emerge.