Rupee tumbles past 88/$ to fresh low on tariff hit

The rupee slumped to an all-time low on Friday, depreciating 0.65 per cent against the dollar to settle at 88.21 per dollar, compared with the previous close of 87.63, amid uncertain growth prospects following the 50 per cent tariff imposed by the United States on Indian goods.

- ANUPREKSHA JAIN

The Indian currency was the worst-performing in Asia after the Indonesian rupiah. Its previous all-time closing low was 87.80 on August 5, while intraday it had touched 87.95 in February. On a monthly basis, the rupee weakened 0.66 per cent in August, the steepest fall since May.

Although Indian exports to the US make up just over 2 per cent of GDP, the high tariff is expected to hit sectors such as gems & jewellery, leather, and textiles, potentially leading to large-scale layoffs.

So far this year, the rupee has depreciated 3.02 per cent, making it the worst performer among Asian peers. In intraday trade, the rupee hit 88.31 to the dollar, prompting the central bank to intervene and trim losses, dealers said. They noted that while depreciation in the local currency could help boost exports, cushioning some of the impact of tariffs, pressure remains elevated.