The rupee showed some improvement, gaining 13 paise from its record low closing level to trade at 86.98 against the US dollar in early trading on Tuesday. This positive movement came after President Donald Trump decided to halt tariffs on Mexico and Canada for a 30-day period.
Forex experts noted that the US dollar index, which had climbed above 109.88, dropped to 108.74 following Trump’s announcement on the temporary suspension of tariffs.
Starting at 86.98 against the greenback, the rupee opened higher by 13 paise compared to its previous close on the interbank foreign exchange market. The previous day, the rupee had dropped 49 paise to a historic low of 87.11 against the US dollar.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented on the market’s reaction to Trump’s tariff announcement, stating that the rupee is expected to trade in the range of 86.80 to 87.20 with a preference for buying on dips. He also mentioned a rise in premiums after the RBI set the cut off for a 6-month swap higher than market expectations.
Trump made the decision to suspend tariffs against Mexico and Canada for 30 days on Monday, after they pledged to enhance border enforcement.
Finance Minister Nirmala Sitharaman clarified that the value of the Indian rupee is market-driven and emphasized that there has been no devaluation, which is a characteristic of a fixed exchange rate system. Despite recent declines that saw the rupee hit an all-time intraday low of 87.29 against the US dollar, Finance Secretary Tuhin Kanta Pandey reassured that there is no significant concern over the rupee’s value as the RBI is effectively managing the currency’s volatility.
In global markets, the dollar index was down 0.22% at 108.74, while Brent crude oil prices dropped by 0.57% to $75.54 per barrel in futures trading.
On the domestic front, the BSE Sensex was up by 716.50 points, or 0.93%, at 77,903.24 points, and the Nifty had gained 199.15 points, or 0.85%, to reach 23,560.20 points. Foreign investors sold equities worth ₹3,958.37 crore in the capital markets on a net basis on Monday.
Furthermore, a survey indicated that India’s manufacturing sector started the year 2025 on a strong note, reaching a six-month high in January with significant growth in exports, particularly the highest since February 2011.
