Rupee falls to historic low after US tariffs are imposed

The Indian rupee fell to a record low against the dollar due to investor concerns about the impact of 50% of US duties on the country's economic growth and corporate profits, writes Bloomberg.

On August 29, the rupee fell by 0.4% to 87.9763 per dollar, exceeding the previous all-time low of 87.9563 reached in February.

On Friday, the Indian currency also fell to a record low against the Chinese yuan, notes Reuters.

"As soon as the rupee hit 87.60, we saw a lot of demand from importers who had no hedged risks. They were all expecting the Reserve Bank of India to intervene, but that didn't happen," said Anindya Banerjee, head of currency research at Kotak Securities.

However, according to traders, by 14:10 Indian Standard Time, the rupee had partially recovered to 88.12 per US dollar after the Central Bank sold dollars.

In 2025, the rupee became Asia's worst performing currency, losing 3% due to the pressure of continued foreign investment outflows from local stocks. Global funds have pulled more than $13 billion from local stocks this year amid weak corporate earnings, while three interest rate cuts by the Reserve Bank of India have weakened support for the national currency.

According to economists, if the US tariffs remain in effect for a year, they are likely to reduce India's GDP growth by 60-80 basis points, which could increase pressure on the already slowing economy.

India's central bank currently expects the economy to grow by 6.5% this fiscal year, which ends March 31.

Reserve Bank of India Governor Sanjay Malhotra told reporters earlier this month that the rupee would fluctuate due to growing uncertainty around tariffs.

According to him, the rupee's fluctuations were less than those of some other countries, such as the United States.

• Earlier, Reuters wrote that India will lose due to Trump's duties twice as much as it saved on oil from Russia.